Monday, August 29, 2011

Positive Consumer Spending Report Lifts Oil and Equities

Crude oil closed higher on Monday as it extends last week's rally on positive consumer spending reports. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes above the reaction high crossing at 89.19 are needed to confirm that a low has been posted. If crude oil renews this summer's decline, the 75% retracement level of the 2009-2011 rally crossing at 71.72 is the next downside target.

First resistance is the reaction high crossing at 89.19. Second resistance is the May-July downtrend line crossing near 95.01. First support is the reaction low crossing at 79.38. Second support is August's low crossing at 76.15.

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