Saturday, May 15, 2010

Crude Oil Weekly Technical Outlook


Crude oil's fall from 87.15 resumed after brief consolidations and dived to as low as 70.83 last week. Short term outlook will remain bearish as long as 78.51 resistance holds and we'd expect a test on key support zone of 68.59/69.50 next. On the upside, above 78.51 will indicate that a short term bottom is formed and bring stronger rebound, possibly for a retest on 87.15 high.

In the bigger picture, as noted before, 33.20 is viewed as a correction to the whole correction that started at 2008 at 147.27. Such rise might have completed at 87.15 already, ahead of 50% retracement of 147.27 to 33.2 at 90.24. Break of 69.50 support will break the series of higher low pattern from 33.2 and will be an important indication that the trend has reversed. In such case, we'll turn bearish on crude oil and expect the then down trend to target a new low below 33.2.

In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 was strong, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that, strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

New Video: How to Take Money and Emotion Out of The Gold Market

Share

3 comments:

Anonymous said...

"...and bring reversal for another low below 33.2 before completing the whole correction from 147.27."

Question: Who's going to produce oil at $33?

Answer: No one.

Anonymous said...

"...strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27."


Question: Who's going to PRODUCE crude at $33?

Answer: No one.

Crude Oil Trader said...

Who? The Soviets....whoops....I mean the Russians are anxious to flex their muscles on the middle east. We still have 26 miles of filled tankers at sea, as never before seen in history. Sure, we can't trade these numbers for long but when we do it will be the start of the "real" bull market for the bulls. Let's focus on cluster support at 58.32 first though.

ShareThis