The oil price has been in a precipitous decline since falling from $66+ in April to a recent low this morning of $52.22, from where it has since rallied strongly. If this low holds, it will form the channel depicted above. This area seems like a nice risk-reward setup for a possible move back to retest the $60 level and horizontal resistance (prior support).
Falling resistance crosses horizontal resistance on the x-axis around the 3rd week in June. This area will likely coincide with the 50-day moving average. Mean reversion to the 50 DMA seems likely, as crude is extremely oversold at this point.
This is a countertrend swing trade. There will be heavy resistance at the $60 level, and oil remains in a downtrend that I think will take it into the $40s again.
