Traders Come to Their Senses, Crude Oil Trades Sharply Lower

Crude oil plummets in European session as investors see price above 80 not justifiable with weak fundamentals. Crude oil traded sharply lower due to profit taking overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If May extends this month's rally, the 75% retracement level of the January-February decline crossing at 81.63 is the next upside target. Closes below the 20 day moving average crossing at 76.32 would confirm that a short term top has been posted.

Tuesday's pivot point, our line in the sand is 80.25

First resistance is Monday's high crossing at 81.15
Second resistance is the 75% retracement level of the January-February decline crossing at 81.63

First support is the 10 day moving average crossing at 77.77
Second support is the 20 day moving average crossing at 76.32

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Natural gas was lower overnight as it extends last week's decline. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term.

If March extends the overnight decline, the 87% retracement level of the December-January rally crossing at 4.734 is the next downside target. Closes above the 20 day moving average crossing at 5.285 would confirm that a short term low has been posted.

Natural gas pivot point for Tuesday is 4.904

First resistance is Monday's gap crossing at 5.008
Second resistance is broken trading range support crossing at 5.060

First support is Monday's low crossing at 4.841
Second support is the 87% retracement level of the December-January rally crossing at 4.734

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The U.S. Dollar was higher overnight hinting that the two day correction off last Friday's high might be ending. Despite the overnight rally, March remains below the 50% retracement level of the 2009 decline crossing at 81.32. Stochastics and the RSI are diverging but are neutral hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 80.03 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 62% retracement level of the 2009 decline crossing at 82.92 is the next upside target.

First resistance is last Friday's high crossing at 81.43
Second resistance is the 62% retracement level of the 2009 decline crossing at 82.92

First support is the 20 day moving average crossing at 80.03
Second support is last Wednesday's low crossing at 79.61

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