Monday, June 28, 2010

Crude Oil Bears Take Monday, But are Signals Turning Neutral to Bullish?

Crude oil closed lower due to profit taking on Monday as it consolidated some of last Friday's rally. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term. If August renews the rally off May's low, the 62% retracement level of last month's decline crossing at 81.13 is the next upside target. Closes below last week's low crossing at 75.17 would confirm that a short term top has been posted. First resistance is today's high crossing at 79.38. Second resistance is last Monday's high crossing at 79.94. First support is the 20 day moving average crossing at 76.30. Second support is last Wednesday's low crossing at 75.17.

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Natural gas closed lower on Monday as it extended this month's decline. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bearish signaling that additional weakness is possible near term. Closes below last Tuesday's low crossing at 4.727 would confirm that a short term top has been posted. Closes above the 10 day moving average crossing at 4.952 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 4.952. Second resistance is the reaction high crossing at 5.249. First support is last Tuesday's low crossing at 4.727. Second support is the reaction low crossing at 4.687.

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The U.S. Dollar closed higher on Monday as it consolidates around the 25% retracement level of the November-June rally crossing at 85.71. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning bearish hinting that additional weakness is possible near term. If September renews this month's decline, the 38% retracement level of the November-June rally crossing at 83.83 is the next downside target. Closes above the 20 day moving average crossing at 87.01 would confirm that a short term low has been posted. First resistance is last Wednesday's high crossing at 86.71. Second resistance is the 20 day moving average crossing at 87.01. First support is last Monday's low crossing at 85.36. Second support is the 38% retracement level of the November-June rally crossing at 83.83.

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Gold posted a key reversal down due to profit taking on Monday and the low range close sets the stage for a steady to lower opening on Tuesday. August gold pulled back from a fresh record high today after the rally lost momentum and a stronger dollar pressured the market. Stochastics and the RSI are diverging and are turning neutral hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1235.00 are needed to confirm that a short term top has been posted. If August renews this year's rally into uncharted territory, upside targets will now be hard to project. First resistance is last Monday's high crossing at 1266.50. First support is the 20-day moving average crossing at 1235.00. Second support is last Thursday's low crossing at 1225.20.

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