As a hypothetical one should watch for an initial move to the the 50-day MA. The nascent rally will probably stall here because of the added supply at this traditional resistance level. A modest retracement down to $120 should see the return of demand and a more forceful challenge on the 50-day MA. This second challenge on the 50-day MA will produce the break and bring the rally to fibonacci retracement levels around June 2008 lows, but with the possibility of extending the rally to around $140. This final push will probably breakdown and start a measured move down; taking oil past 50-day and 200-day MAs and ultimatley down to $98 circa April 2008 lows (perhaps with modest bounces at each of the aforementioned moving averages). From there it could see a sideways trading pattern knocking between $95 and $145 for a couple of years as the global economy finds its footing - thereby ending the cyclical bear market.
Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website