Technical analysis: Crude breaks key long term support, aims levels below $40

Crude prices have been breaking all the short term support barriers and now in the new year, the downside barrier of an uptrend dating back to 1998 has been broken, opening new lows below $40.

Brent crude for spot delivery had broken the $50 psychological support on 9 January itself and this week it has extended the fall to as low as $45.16 by Tuesday before settling off the lows.

The commodity is showing weakness on Wednesday (14 January) as well, with all the varieties trading below the previous day's close. The WTI crude for 15 February delivery is trading at $45.42, slightly off the multi-year low of $44.20 touched on Tuesday.

The next psychological barrier for various crude contacts on the downside is $40, though charts suggest lower levels as support.

The Brent spot, now aims $37.42 and after that $33.73 before heading towards the $20 zone. In case the break of the trend support doesn't live longer, the resistance that first comes in focus is $52.30 and then $67.20.

A break above $67 will confirm the technical reversal off the channel support now held in the $40-$50 region.