Wednesday, August 4, 2010

Crude Oil Falls on Profit Taking, Bulls Still Hold The Advantahe

Crude oil closed lower due to profit taking on Wednesday as it consolidates some of this week's rally. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If September extends the rally off May's low, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 78.14 would confirm that a short term top has been posted. First resistance is today's high crossing at 82.97. Second resistance is the reaction high crossing at 84.50. First support is the 10 day moving average crossing at 79.54. Second support is the 20 day moving average crossing at 78.14.

Natural gas closed higher due to short covering on Wednesday as it consolidates some of this week's decline. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.579 are needed to confirm that a short term top has been posted. If September renews the rally off July's low, June's high crossing at 5.282 is the next upside target. First resistance is Monday's high crossing at 5.007. Second resistance is June's high crossing at 5.282. First support is Tuesday's low crossing at 4.625. Second support is the 20 day moving average crossing at 4.579.

The U.S. Dollar closed higher due to short covering on Wednesday as it consolidates some of the decline off June's high. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remain neutral to 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 82.66 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 81.85. Second resistance is the 20 day moving average crossing at 82.66. First support is Tuesday's low crossing at 80.56. Second support is the 62% retracement level of the November-June rally crossing at 80.47.

Gold closed higher on Wednesday and above the 20 day moving average crossing at 1189.20 confirming that a short term low has been posted. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If August extends this week's rally, the reaction high crossing at 1218.80 is the next upside target. Closes below the 10 day moving average crossing at 1179.70 would temper the friendly outlook. First resistance is today's high crossing at 1203.00. Second resistance is the reaction high crossing at 1218.80. First support is the 10 day moving average crossing at 1179.70. Second support is last Wednesday's low crossing at 1155.60.

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