Wednesday, February 1, 2012
Crude Oil Supply Gains Puts Crude Oil Bulls on Their Backs.....Again!
Crude oil for the past week and a half has lacked any real cohesive direction, in our opinion. With a Score of -55, it reflects a true trading range. We believe we are now at the lower levels of the trading range and would not be surprised to see a pop to the upside.
We still remain longer term positive on this market and expect to see it make some new highs soon, however it must move over resistance at $102 to get its upside momentum into high gear.
With our daily and monthly Trade Triangles in positive modes, we expect we will see further market consolidation in crude oil. Long term traders should be long this market with appropriate money management stops.
Crude oil closed lower on Wednesday and the low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.
If March renews January's decline, December's low crossing at 92.95 is the next downside target. Closes above the reaction high crossing at 101.39 are needed to confirm that a short term low has been posted.
First resistance is the reaction high crossing at 101.39. Second resistance is the reaction high crossing at 102.24. First support is last Monday's low crossing at 97.40. Second support is December's low crossing at 92.95.
Here is a preview of the MarketClub Trade Triangle Chart Analysis and Smart Scan technology