Thursday, June 17, 2010

Crude Oil Signals Remain Bullish Despite Overbought Condition

Crude oil closed lower due to profit taking on Thursday as it consolidated some of this week's rally. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If July extends the rally off May's low, the 50% retracement level of last month's decline crossing at 78.46 is the next upside target. Closes below the 20 day moving average crossing at 73.23 would confirm that a short term top has been posted. First resistance is Wednesday's high crossing at 78.13. Second resistance is the 50% retracement level of last month's decline crossing at 78.46. First support is the 10 day moving average crossing at 74.48. Second support is the 20 day moving average crossing at 73.23.

Natural gas closed higher on Thursday and the high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If July extends the rally off May's low, the 62% retracement level of the November-May decline crossing at 5.429 is the next upside target. Closes below the 20 day moving average crossing at 4.580 would confirm that a short term top has been posted. First resistance is Wednesday's high crossing at 5.196. Second resistance is the 62% retracement level of the November-May decline crossing at 5.429. First support is the 10 day moving average crossing at 4.895. Second support is the 20 day moving average crossing at 4.580.

The U.S. Dollar closed lower on Thursday as it extends the decline off last week's high. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term. If September extends the decline off last week's high, the 25% retracement level of the November-June rally crossing at 85.71 is the next downside target. If September renews this year's rally into uncharted territory, upside targets will now be hard to project. First resistance is the 20 day moving average crossing at 87.30. Second resistance is the 10 day moving average crossing at 87.61. First support is today's low crossing at 85.80. Second support is the 25% retracement level of the November-June rally crossing at 85.71.

Gold closed higher on Thursday as it extends this week's rally. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If August renews this spring's rally into uncharted territory, upside targets will now be hard to project. Closes below the reaction low crossing at 1198.10 are needed to confirm that a short term top has been posted. First resistance is last Tuesday's high crossing at 1254.50. First support is the 20 day moving average crossing at 1219.50. Second support is the reaction low crossing at 1198.10.


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