Thursday, November 17, 2011

Crude Oil Bulls Lose Ground on Key Reversal Down Day

Crude oil posted a key reversal down on Thursday and below the 62% retracement level of the May-October decline crossing at 100.08 as it consolidated some of the rally off October's low. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends the rally off this month's low, the 75% retracement level of the May-October decline crossing at 105.42 is the next upside target. Closes below the 20 day moving average crossing at 94.97 are needed to confirm that a short term top has been posted. First resistance is the 75% retracement level of the May-October decline crossing at 105.42. Second resistance is the 87% retracement level of the May-October decline crossing at 110.46. First support is the 10 day moving average crossing at 97.83. Second support is the 20 day moving average crossing at 94.97.

Natural gas closed higher due to short covering on Thursday as it consolidated some of this year's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If December extends this year's decline, monthly support crossing at 3.225 is the next downside target. Closes above the 20 day moving average crossing at 3.695 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 3.573. Second resistance is the 20 day moving average crossing at 3.695. First support is Wednesday's low crossing at 3.326. Second support is monthly support crossing at 3.225.

Gold closed lower on Thursday and below the 20 day moving average crossing at 1743.90 confirming that a short term top has been posted. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are turning bearish hinting that a short term top might be in or is near. If December extends today's decline, the reaction low crossing at 1681.20 is the next downside target. Closes above Monday's high crossing at 1797.60 are needed to confirm that a short term top has been posted. First resistance is Monday's high crossing at 1797.60. Second resistance is the 75% retracement level of the 2008-2011 rally crossing at 1826.50. First support is today's low crossing at 1711.00. Second support is the reaction low crossing at 1681.20.


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