Tuesday, May 18, 2010

Crude Oil, Natural Gas, Gold and Dollar Commentary For Tuesday Evening

Crude oil closed lower on Tuesday and below last September's low crossing at 69.40. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If June extends this month's decline, last July's low crossing at 65.66 is the next downside target. Closes above the 20 day moving average crossing at 79.44 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 74.62. Second resistance is the 20 day moving average crossing at 79.44. First support is today's low crossing at 68.91. Second support is last July's low crossing at 65.66.

Natural gas closed lower due to profit taking on Tuesday as it consolidated some of last week's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If June extends this month's rally, the 38% retracement level of the October-April decline crossing at 4.715 is the next upside target. Closes below the 20 day moving average crossing at 4.171 would temper the near term friendly outlook. First resistance is today's high crossing at 4.494. Second resistance is the 38% retracement level of the October-April decline crossing at 4.715. First support is the 10 day moving average crossing at 4.191. Second support is the 20 day moving average crossing at 4.171.

The U.S. Dollar closed higher on Tuesday as it extends this year's rally. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If June extends this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. Closes below the 20 day moving average crossing at 83.70 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 87.30. Second resistance is weekly resistance crossing at 87.79. First support is the 10 day moving average crossing at 85.30. Second support is the 20 day moving average crossing at 83.70.

Gold closed lower due to profit taking on Tuesday as it consolidated some of the rally off February's low. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought, diverging and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1189.40 would confirm that a short term top has been posted. If June extends this year's rally into uncharted territory, upside targets are hard to project. First resistance is last Friday's high crossing at 1249.70. First support is today's low crossing at 1206.60. Second support is the 20 day moving average crossing at 1189.40.


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