Tuesday, September 13, 2011

Lower Inventory Forecast Boost Oil Prices Before Tuesdays Open

According to Bloomberg news this morning a survey of analyst [according to the median of 10 analyst estimates in a Bloomberg News survey] shows the U.S. Energy Department may say U.S. crude supplies dropped by 3 million barrels last week in a report due out tomorrow. Giving crude oil bulls a boost before Tuesdays open in the U.S.

But that boost is only enough to bump traders into the "new normal" resistance in the 90+ area with Stochastics and RSI remaining overbought and diverging. Turning bearish signaling that sideways to lower prices are still likely near term.

Closes below last Tuesday's low crossing at 83.20 would confirm that the corrective rally off August's low has ended while opening the door for a possible test of August's low crossing at 76.15 later this fall. If October renews the rebound off August's low, the May-July downtrend line crossing near 92.66 is the next upside target.

First resistance is last Wednesday's high crossing at 90.48. Second resistance is the May-July downtrend line crossing near 92.66. First support is last Tuesday's low crossing at 83.20. Second support is the reaction low crossing at 82.95. Crude oil pivot point for Tuesday morning is 87.39.

Just click here for your FREE trend analysis of crude oil ETF USO

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