Is The Oil Sell Off Over?

Crude Oil capped a long run higher with a top at the end of September. The last 3 months of that run had already transitioned to a sideways channel, but the September high literally put a cap on the rally. Since then it has been diving to the downside. It confirmed that top when it passed the August low, but it did not seem to notice as it continued lower. Today it sits at a 52 week low.

But crude oil prices are also at a 61.8% retracement of the rally that took it to that September high. If the price was looking for a place to bounce this is a good one technically. It also has extreme bearish momentum. The RSI is oversold, but starting to rebound from levels not seen since 2012. The MACD is at 4 year lows as it continues to the downside. Only the late 2014 low is deeper, when the price of oil fell 60% in 6 months.

There are only minor signs that the drop might end. First is that RSI reversing. Also a 3 day pause in the price action with a slight upward movement. But this could also be a bear flag as well, digesting before another leg down. Volume has been light on the upward drift re-enforcing the bear flag view. Should it continue lower the next target would be an 88.6% retracement to about 46.