NYMEX oil has developed a downtrend with a retreat from the upper resistance level near $110 starting in September, 2013. The weekly NYMEX oil chart shows an uptrend starting in June, 2012 shown on the chart by trend line A. The recent fall below trend line A has confirmed new downtrend pressure.
The weekly NYMEX oil chart shows four levels of support and resistance near $78, $88, $98 and $109. Starting in July, 2012 oil has traded in a sideways band between $88 and $98. The breakout above this trading band in July, 2013 was not the start of a new uptrend, but rather a temporary rally towards resistance near $109.
Trend line A starts in June, 2012 from the low near $78, the best placement of which starts near $81. This trend line connects the lows in November and December of 2012, as well as the April, 2013 low, providing three anchor points for the uptrend line. The trend line was successfully tested again as a support level in November, 2013.
(Read more: Shell shock: Oil giant warns of 'significantly lower' profit)