Chart of the Day - May Crude Oil

The information and opinions expressed below are based on my analysis of price behavior and chart activity

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Tuesday, March 24, 2026

 May Crude Oil (Daily) 

As of this writing, Crude Oil is still open and trading near 92.40.  None of the prices mentioned below are settlement, closing or end-of-the-day prices, unless otherwise noted.

Let me start by saying that I have no idea what’s actually going on in Iran, how long this will last or anything like that. I’m of the opinion that anyone that really knows, probably isn’t talking.  There’s so much “headline trading” and conflicting information being released, the only thing that I’m fairly certain of, is that there have been quite a number of missiles, bombs and drones flying around that part of the world.  My comments are based solely on price activity and what the charts look like. 

May Crude Oil started the week by posting a large bearish engulfment on the chart and closed Monday’s trade at 88.13, the lowest market close since March 11^th.   That took out, not only Friday’s trade, but all of last week’s price activity.  Volume on Monday was the 3^rd highest since the conflict began.  I think it’s interesting to note that the 3 highest volume days were all “red” candles.  2 of those days resulted in price gains, but yesterdays did not, and all three of those days saw the closing prices well off the highs.  That seems like more sellers than buyers to me, but some time will have to pass before we’ll know if that’s a correct assessment. The market did tick up and set a high not seen since March 9^th, but failed to hold those gains. Last Wednesday’s trade also posted a Doji (almost) or a price equilibrium day and Monday’s bearish close was the first directional close outside Wednesday’s range.  I don’t think that’s usually a friendly or bullish development. 

Today, it is trading higher again, but the 10- day moving average (red) has acted as a resistance level, so far.  This may be acting like a “Turnaround Tuesday”, but we’ll have to wait a day or two see if that’s correct.  You may notice on the chart above that the 5-day average (blue) has been starting to hook lower over the past few days.  Those averages are, roughly, 93.85 (5-day) and 93.46 (10-day) at the moment and are above the market offering potential resistance. The long-term averages on the chart above (50/100/200, green/grey/purple) are all well below the market, with the 50-day being the closest at about 71.25.  Stochastics (bottom sub-graph) are near mid-range, but do seem to have a little downward bias.  Surprisingly, Crude Oil is one market that doesn’t seem to spend extended periods of time being overbought/oversold.  You might see that the longest period for either condition was about 8 days of oversold last October.  There’s also a price gap from February 27^th, at 67.65 that may eventually be filled.

I have no futures recommendation at this time. I think that most readers would be better served by avoiding them, for the time being.  Volatility has jumped dramatically, actionable news is hard to come by or discern and headline whipsaws can make trade risk management difficult.  You might do just as well by closing your eyes, picking a direction and throwing a dart. Futures margin for the May contract is over $11,000 per contract, according to my screen. 

Aggressive and well-margined traders may do well to consider the Crude Oil Options.  May options expire in 23 days.

Given the recent weakness, I might lean a little toward the Put side.  $80 Puts last traded at 3.15.  If you can buy those for 3.00 or less ($3,000 out-of-pocket, per option, before commissions/fees) that may work out well for you.  Look to exit those Puts at 3x what you paid for them.  I would recommend risking about ½ of the premium paid, but I wouldn’t recommend a working stop order, because sometimes option prices, bids and offers, can get skewed during headline trading.

If you’re of the opinion that this is a buying opportunity, then Call options might be the better choice.  Since the market has run up over the past month, Calls are bit more expensive than Puts.  $105 Calls last traded at 3.99, or $3,900 out-of-pocket, per option, before your commissions/fees.  If those can be bought for 3.50, or $3,500 each, before expenses, that may offer a good value.  Just like the Puts above, look to exit those options at 3x what you paid for them and risk about ½ of the premium paid. 

May Crude Oil (Weekly)

Until the recent war/excursion/hostilities broke out, the weekly chart seems to show prices declining since this contract peaked in July 2024.  Not aggressively, but still in a downtrending pattern.  The long-term moving averages are still in a bearish configuration, but the 50-week (green) has started to turn up over the past few weeks, as has the 100-week (grey) but to a lesser extent.  The 200-day (purple) is almost a flat line.  The short-term averages displayed above, the 5- and 10-week (blue/red) made a bullish crossover in the middle of January.  The 5-week (88.22-ish) has acted as a support level so far this week and the 10-week is down near 75.80.  To my eye, the 5-week average has offered good support every week since the bullish crossover in January. Weekly Stochastics (bottom sub-graph) are coming out of overbought and are pointing lower. 

Last week’s bar was also a bit of an equilibrium bar, with the open and close not very far apart and closed the week lower than it started.   Large wicks under the last three bars indicate supportive buying interest to me. 

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Jefferson Fosse  Walsh Trading

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