Oil has staged an impressive recovery to the upside over the last few months, however, the long-term down trend can't be ignored and the market is now approaching major key levels or resistance/containment around $50-to-$51, and again near $55.

Traders should watch out for a major exhaustion move in prices up near those resistance levels that may lead to a bearish reversal signal at some point in the coming days and weeks ahead. Such an event could produce a $3-to-$5 move lower as prices reverse off those major levels and take a breather. We would also look at being buyers at some point, but the nearest support worth consider to go long (buy) from is well below at $42.50 and isn't relevant at this moment in time since it's so far away.

Image placeholder title

TheStreet Recommends

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.