Tuesday, July 27, 2010

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

Crude oil closed lower due to profit taking on Tuesday as it consolidated some of this month's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought 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 76.41 would temper the near term friendly outlook. If September extends the rally off this month's low, June's high crossing at 80.82 is the next upside target. First resistance is today's high crossing at 79.69. Second resistance is June's high crossing at 80.82. First support is the 20 day moving average crossing at 76.41. Second support is the reaction low crossing at 74.40.

Natural gas closed higher on Tuesday as it extended last week's rally. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Closes above last Thursday's high crossing at 4.699 are needed to confirm that a short term low has been posted. Closes below the 10 day moving average crossing at 4.543 would temper the near term friendly outlook. First resistance is last Thursday's high crossing at 4.699. Second resistance is the reaction high crossing at 4.945. First support is the 10 day moving average crossing at 4.543. Second support is the reaction low crossing at 4.290.

The U.S. Dollar closed higher due to short covering on Tuesday as it consolidates above the 50% retracement level of the November-June rally crossing at 82.15. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bearish signaling that additional weakness is possible near term. If September extends the decline off June's high, the 62% retracement level of the November-June rally crossing at 80.47 is the next downside target. Closes above the 20 day moving average crossing at 83.69 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 82.82. Second resistance is the 20 day moving average crossing at 83.69. First support is today's low crossing at 81.97. Second support is the 62% retracement level of the November-June rally crossing at 80.47.

Gold closed lower on Tuesday and tested the 50% retracement level of this year's rally crossing at 1158.30. Stochastics and the RSI are turning neutral to bearish hinting that additional weakness is possible near term. If August extends the decline off June's high, the 62% retracement level of the aforementioned decline crossing at 1132.70 is the next downside target. Closes above the 20 day moving average crossing at 1200.50 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 1189.50. Second resistance is the 20 day moving average crossing at 1200.50. First support is today's low crossing at 1156.90. Second support is the 62% retracement level of the aforementioned decline crossing at 1132.70.

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