Wednesday, May 19, 2010

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

Crude oil posted an upside reversal due to short covering on Wednesday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Thursday. 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 78.80 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 73.71. Second resistance is the 20 day moving average crossing at 78.80. First support is today's low crossing at 67.90. Second support is last July's low crossing at 65.66.

Natural gas closed lower on Wednesday and below the 20 day moving average crossing at 4.177 tempering the near term friendly outlook. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that sideways to lower prices are possible near term. If June renews this month's rally, the 38% retracement level of the October-April decline crossing at 4.715 is the next upside target. First resistance is Tuesday'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 today's low crossing at 4.131. Second support is this month's low crossing at 3.855.

The U.S. Dollar posted a downside reversal due to profit taking on Wednesday as it consolidated some of this year's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but remain neutral to 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 83.96 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is the 10 day moving average crossing at 85.53. Second support is the 20 day moving average crossing at 83.96.

Gold closed sharply lower due to profit taking on Wednesday as it extended the decline off last week's high. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 1191.30 would confirm that a short term top has been posted. If June renews 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 the 20 day moving average crossing at 1191.30. Second support is today's low crossing at 1186.60.

Latest Video: Crude Oil Breaks $70 a Barrel, is it Time to be Short?

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