Chart of the Day - Wednesday, February 26th, 2020

Today’s Chart of the Day was shared on Twitter by Peter Brandt (@PeterLBrandt). It’s a weekly candlestick chart of Crude Oil futures. Crude has spent the past year in a well-defined range between roughly $50-$63 per barrel. It’s been a frustrating trade in recent weeks as it whipsawed above and below that key $50 support level several times. However, this week, price seems to have decisively broken down from that level. Peter labels the trading range as a rectangle pattern. Price targets can be calculated from this classic chart pattern by taking the height of the rectangle ($13) and subtracting it from the breakdown level ($50). This gives you a target of around $37 per barrel, which is over 20% below current prices. This is good news for consumers at the gas pump, but lousy news for Crude Oil bulls.