Crude oil tried the major resistance zone at $ 50 yesterday, and got pretty close to it, but buyers failed to reach or break above that level for the second time, because they got cold feet after failing at that area, and closed their buy positions in anticipation of a decline.

The price turned bearish after that, and the decline that followed was quite ferocious. US WTI Oil lost around 250 pips in a matter of hours, as the price crashed lower. But, the decline ended at the 100 SMA (green) on the H4 chart. This moving average held the retreat lower in December, after the first rejection below $ 50.

So, the 100 SMA turned into support once again. The stochastic indicator became oversold on this time-frame as well, which was a sign that the retrace down was over. Today, we see that crude oil is bouncing higher again, having climbed more than 200 pips from the bottom, which shows that the buying pressure remains strong.

Now, oil is heading for the big target at $ 50 again, and it might well break above it this time, considering that the bounce has also been quite strong today. Oil is approaching the $ 50 level very fast now, so let’s see if it can break above $ 50 this time.