The price of oil has fallen off a cliff.

It’s down 25% in the past six weeks. And most of the talking heads on CNBC think it’s headed lower.

But the technical picture says they’re probably wrong.

The price of the gooey black stuff looks poised for a short-term bounce.

[ad#Google Adsense 336×280-IA]As you can tell from the chart below, oil is approaching the support line at last October’s low. That should at least cause the decline to pause.

Also, the price of oil is now 18% below its 200-day moving average line.

Oil rarely moves further away than that, before reversing and trending back toward the line.

Oil may not have bottomed for the year. But it has fallen so far and so fast that traders should be prepared for a short-term bounce.

– Jeff Clark

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Source: Brian Hunt’s Market Notes