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.

 

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