Thursday, September 8, 2011

Crude Oil Bulls Gain New Strength in Thursday Morning Trading

Crude oil was slightly lower in Wednesday evenings overnight session as it consolidates some of Wednesday's rally. Yesterdays break through 89.90 resistance hints that a rebound from 75.71 has resumed as prices are diverging and are turning neutral to bullish signaling that sideways to higher prices may be possible near term. Stochastics and the RSI are overbought

If October extends the rebound off August's low, the May-July downtrend line crossing near 93.41 is the next upside target. Closes below Tuesday's low crossing at 83.20 would confirm that the rally off August's low has ended. 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 the overnight high crossing at 90.11. Second resistance is the May-July downtrend line crossing near 93.41. First support is Tuesday's low crossing at 83.20. Second support is the reaction low crossing at 82.95. Crude oil pivot point for Thursdays trading is 88.66.

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