The chart above depicts a longer term Elliot Wave count. Since 1998, oil has enjoyed a 5-wave bull run culminating in July 2008. Recent price action has since corrected 64% of this up move in just a few months, without a major countertrend rally. It is due for a bounce, the only question is when.
The bear trend is definately reaching exhaustion, as MACD is diverging with price and volume has been downtrending. I think $42.50 should prove to be strong support for a two reasons: first, it was the Wave4 low back in 2007, and second, Wave-c = Wave-a @ $42.34. Add to that the fact that commercial traders are more net long than anytime since the January 2007 low, and you have a recipe for a nice bull move.