Saturday, August 14, 2010

Crude Oil Weekly Technical Outlook For Saturday August 14th

Crude oil's fall from 82.97 extended further last week and the break of  75.9 support, as well as the close below near term rising trend line, serve as an important alert that whole rebound from 64.23 is completed at 82.97 already. Initial bias will remain on the downside this week and deeper fall should be seen to 71.09 support next. On the upside, above 77.40 minor resistance will turn intraday bias neutral and bring recovery. But risk will now remain on the downside as long as 82.97 resistance holds.

In the bigger picture, choppy rebound from 64.23 is treated as a correction to fall from 87.15 only and has possibly finished at 82.97 already. Break of 71.09 will affirm this case and indicate that whole fall from 87.15 is resuming for 60 psychological level, (50% retracement of 33.2 to 87.15 at 60.18, 100% projection of 87.15 to 64.23 from 82.97 at 60.05). Decisive break there will indicate that fall from 87.15 is developing into a powerful impulsive wave and would target 33.2 low. On the upside, even in case of another rise, focus will remain on reversal signal as crude oil enters into resistance zone of 82.97/87.15.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall from 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

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