Wednesday, June 2, 2010

Crude Oil Bulls Gain Momentum on High Range Close

Crude oil closed higher due to short covering on Wednesday ending a two day correction off last Friday's high. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 75.05 are needed to confirm that a short term low has been posted. If July renews the decline off May's high, last July's low crossing at 66.11 is the next downside target. First resistance is the 20 day moving average crossing at 75.05. Second resistance is last Friday's high crossing at 75.72. First support is the 10 day moving average crossing at 71.82. Second support is last Tuesday's low crossing at 67.15.

Natural gas closed higher on Wednesday as it extends the rally off last week's low. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If July extends this week's rally, May's high crossing at 4.587 is the next upside target. If July renews the decline off May's high, the reaction low crossing at 3.971 is the next downside target. First resistance is today's high crossing at 4.440. Second resistance is May's high crossing at 4.587. First support is last Tuesday's low crossing at 4.036. Second support is the reaction low crossing at 3.971.

The U.S. Dollar closed higher on Wednesday but the mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are diverging but are neutral to bearish signaling that sideways trading is possible near term. If June renews 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 reaction low crossing at 85.33 are needed to confirm that a short term top has been posted. First resistance is the reaction high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is the 20 day moving average crossing at 86.01. Second support is the reaction low crossing at 85.33.

Gold closed lower due to profit taking on Wednesday. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If August extends this week's rally, May's high crossing at 1251.40 is the next upside target. First resistance is Tuesday's high crossing at 1230.60. Second resistance is May's high crossing at 1251.40. First support is the 20 day moving average crossing at 1210.80. Second support is the 10 day moving average crossing at 1205.40.



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