Saturday, November 6, 2010

Oil N'Gold: Crude Oil Weekly Technical Outlook For Saturday Nov. 6th

Crude oil finally broken out of the consolidations from 84.43 and resumed the up trend to as high as 87.43. The close above 87.15 key resistance indicates that medium term rise is resuming. Initial bias remains on the upside this week and further rally should be seen to 100% projection of 64.23 to 82.97 from 70.76 at 89.50 next. On the downside, below 85.96 minor support will turn intraday bias neutral and bring retreat. But break of 79.25 support is needed to signal reversal. Otherwise, outlook will remain bullish.

In the bigger picture, the close above 87.15 key resistance indicates that whole medium term rebound from 33.2 has resumed. Such rise is treated as the second wave of the consolidation pattern that started at 147.27. Further should now be seen towards 50% retracement of 147.27 to 33.2 at 90.24 and possibly further to 61.8% retracement at 103.70. On the downside, break of 64.23 support is needed to confirm that crude oil has topped. Otherwise, we won't turn bearish.

In the long term picture, rebound from 33.2 is not finished yet. But overall view remains unchanged. Crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2, second wave from there unfolding. Current development suggests that a breach of 61.8% retracement at 103.70 is likely. But we'll then start to focus on reversal signal again above 103.70.

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