Thursday, September 1, 2011

Crude Oil Bears Enjoying Strong Resistance at 89.54

Crude oil was slightly lower in overnight trading as it consolidates some of this week's rally. Stochastics and the RSI are overbought and we remain bearish with 89.54 support turned resistance still providing crude oil bears with some of the strongest resistance we have seen in some time.

Closes above the reaction high crossing at 89.19 are needed to confirm that a short term low has been posted. Closes below the 20 day moving average crossing at 85.52 would signal that a short term top has been posted. If October renews the decline off May's high, the 75% retracement level of the 2009-2011 rally crossing at 71.73 is the next downside target.

First resistance is Wednesday's high crossing at 89.54. Second resistance is the May-July downtrend line crossing near 94.35. First support is the 20 day moving average crossing at 85.52. Second support is the reaction low crossing at 82.95. Crude oil pivot point for Thursday trading is 88.67.

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