Crude oil closed sharply lower on Thursday and below the 20 day moving average crossing at 99.21 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 have turned bearish signaling that sideways to lower prices are possible near term. If February extends today's decline, the reaction low crossing at 98.30 is the next downside target.
If February renews the rally off December's low, the 75% retracement level of the 2011 decline crossing at 104.84 is the next upside target. First resistance is last Wednesday's high crossing at 103.74. Second resistance is the 75% retracement level of the 2011 decline crossing at 104.84. First support is the reaction low crossing at 98.30. Second support is December's low crossing at 92.70.
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