February crude oil closed sharply lower on Wednesday due to profit taking as it consolidated some of the rally off December’s low.

Today’s low range close sets the stage for a steady to lower opening on Thursday.

Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month’s rally, the reaction high crossing at $52.95 is the next upside target.

Closes above the reaction high crossing at $52.95 are needed to confirm that a short term low has been posted.

Closes below last Wednesday’s low crossing at $36.94 would temper the near term friendly outlook in the market.

First resistance is Tuesday’s high crossing at $50.47.

Second resistance is the reaction high crossing at $52.95.

First support is today’s low crossing at $43.26.

Second support is the 10 day moving average crossing at $42.28.

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