US Crude Oil futures followed the stock market lower once again during Tuesday's trading session to close below the $90 a barrel level. The decline triggered a breakout sell signal, identified by Autochartist on the 240-minute chart.
Crude Oil futures have been rising in a steady Channel Up chart pattern with well defined support and resistance levels. After failing to move past resistance near $95 per barrel, a retracement back through support near $91 on average momentum initiated the breakout signal. This Channel Up pattern has been developing for several weeks and scores high in all categories, suggesting a high probability for a completion of the pattern.
Autochartist has generated a forecast for a lower price range resulting from the breach of the Channel Up formation. The minimum projected target is $85.08 per barrel, with a possible prolonged decline carrying the market as low as $78.01 per barrel. This would bring the price within close range of the major swing low that occurred at the beginning of the channel, a level which will have to hold for US Crude Oil futures to maintain their long term bullish trend.
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