Technical Analysis Crude Oil for 8/31/15

Crude oil prices rallied for a second consecutive day on Friday, boosting the entire petroleum complex as shorts headed for the exits and bulls prepared for a squeeze.  The increase comes despite an increase in the Baker Hughes rig count which increased for the 6^th consecutive week.  Solid increases in consumer spending and income along with the revival of a conflict between the Saudis and Yemen have helped boost prices.

Crude oil broke out on Thursday and continue to rally on Friday.  Prices closed above a downward sloping trend line that coincides with the 20-day moving average.  The next level of target resistance is seen near $49.  Support is seen near the recent lows at $38.22. Momentum has turned positive with the MACD (moving average convergence divergence) generating a buy signal.