Tuesday, April 13, 2010

Crude Oil Bulls Struggle as Stochastics and RSI Turn Bearish


Crude oil closed lower on Tuesday as it extends Monday's breakout below the 10 day moving average crossing at 84.90 signaling that a short term top has likely been posted. A short covering rally tempered early losses and the high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI have turned bearish signaling that a short term top might be in or is near. Closes below the 20 day moving average crossing at 83.22 are needed to confirm that a short term top has been posted. If May renews the rally off February's low, the 50% retracement level of the 2008-2009 decline crossing at 97.31 is the next upside target. First resistance is last Tuesday's high crossing at 87.09. Second resistance is the 50% retracement level of the 2008-2009 decline crossing at 97.31. First support is the 20 day moving average crossing at 83.22. Second support is today's low crossing at 82.51.

Natural gas closed higher due to short covering on Tuesday and the high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Multiple closes above last Tuesday's high crossing at 4.334 are needed to confirm that a low has been posted. If May renews this winter's decline, weekly support crossing at 3.502 is the next downside target. First resistance is last Tuesday's high crossing at 4.334. Second resistance is the 25% retracement level of the October-April decline crossing at 4.405. First support is last Thursday's low crossing at 3.857. Second support is the early April low crossing at 3.810.

The U.S. Dollar closed lower on Tuesday as it extends the decline off March's high. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If June extends this week's decline, March's low crossing at 79.73 is the next downside target. Closes above last Thursday's high crossing at 82.06 are needed to confirm that a short term low has been posted. First resistance is Monday's gap crossing at 81.01. Second resistance is the 20 day moving average crossing at 81.28. First support is Monday's low crossing at 80.22. Second support is March's low crossing at 79.73.










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