Wednesday, September 7, 2011

Bulls Face Challenge of Strong Resistance as Crude Oil Closes Higher

Crude oil closed higher on Wednesday and above the reaction high crossing at 89.19 confirming that a low has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought and are turning bearish signaling that a short term top might be in or is near.

If October renews this summer's decline, the 75% retracement level of the 2009-2011 rally crossing at 71.72 is the next downside target. Closes above the May-July downtrend line crossing near 93.57 would confirm an end to this summer's downtrend.

First resistance is last Thursday's high crossing at 89.90. Second resistance is the May-July downtrend line crossing near 93.57. First support is Tuesday's low crossing at 83.20. Second support is the reaction low crossing at 79.38.

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