Wednesday, April 7, 2010

Crude Oil Market Commentary For Wednesday Evening


Crude oil closed lower on Wednesday due to an increase in oil inventories and a decline in the equity markets. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If May extends the rally off February's low, the 50% retracement level of the 2008-2009 decline crossing at 97.31 is the next upside target. Closes below the 20 day moving average crossing at 82.60 are needed to confirm that a short term top has been posted. First resistance is 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 10 day moving average crossing at 83.34. Second support is the 20 day moving average crossing at 82.60.

Natural gas closed lower due to profit taking on Wednesday as it consolidated some of Monday's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Multiple closes above 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 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 today's low crossing at 4.010. Second support is last Thursday's low crossing at 3.810.

The U.S. Dollar closed higher due to short covering on Wednesday as it consolidated some of last week's decline but remains below the 10 day moving average crossing at 81.59. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below last week's low crossing at 80.52 are needed to confirm that a short term top has been posted. If June renews this winter's rally, the May 2009 high on the weekly continuation chart crossing at 83.34 is the next upside target. First resistance is March's high crossing at 82.52. Second resistance is the May 2009 high on the weekly continuation chart crossing at 83.34. First support is the 20 day moving average crossing at 81.12. Second support is last Thursday's low crossing at 80.52.


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