Oil plays moving average ping pong and remains bearish – BAML

Paul Ciana, Technical Strategist at BofA Merrill Lynch, explains that oil prices remain in a technical downtrend as defined by the downward sloping channel and price being below the 200d SMA.

Key Quotes

“Over the past two weeks oil prices have pivoted from support and resistance from a variety of simple moving averages including the 20, 50, 100 and to an extent the 200 day. As resistance, we are watching the 20d at $48.63 and the 200d at $49.38. As major support and really the only major technical moving average level standing between spot and the lower $40's is the 50d SMA currently at $46.60.” 

“Trend line resistance is declining. The solid downward sloping line just above the channel ending August is at $50.36. The August high was $50.43. And so a close up through that could lead to a retest of the YTD highs.”