Oil Forming A Bear Flag, Target Is $50 Per Barrel

Oil has had a wild ride of late. After trading as low as $55, it spiked to $77/bbl on the back of the brief war between Israel and Iran. However, it quickly fell back to the $64-$68 level. For the last two weeks it has chopped in this range, creating what is known in technical analysis as a bear flag.

A bear flag implies impending downside. Should the bear flag play out to fruition, the downside target of U.S. crude oil is $50/bbl. For this to happen, the U.S. economy would likely have to weaken considerably. Considering the tariff/trade wars, this is not out of the question.

The bias on oil is negative.