Tuesday, July 6, 2010

Crude Oil Signals are Oversold, Lower Prices Still Possible Near Term

Crude oil was higher due to short covering overnight as it consolidates some of last week's decline. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term.

If August extends last week's decline, the reaction low crossing at 70.93 is the next downside target. Closes above the 20 day moving average crossing at 76.22 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 75.13
Second resistance is the 20 day moving average crossing at 76.22

Crude oil's pivot point for Tuesday morning is 71.93

First support is the overnight low crossing at 71.09
Second support is the reaction low crossing at 70.93

Does this one chart line spell doom for the markets?

Natural gas was slightly higher overnight as it consolidates above the 10 day moving average crossing at 4.759. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 4.858 would confirm that a short term low has been posted. If August renews last week's decline, the reaction low crossing at 4.285 is the next downside target.

First resistance is the 20 day moving average crossing at 4.858
Second resistance is June's high crossing at 5.249

Natural gas pivot point for Tuesday morning is 4.765

First support is last Wednesday's low crossing at 4.477
Second support is the reaction low crossing at 4.285

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