Friday, May 25, 2012

Low Volume Crude Oil Trading Day Ends with a Fractional Gain

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Crude oil [July contract now] closed higher due to short covering on Friday as it bounces off the 62% retracement level of the 2011-2012 rally crossing at 90.26. The mid range close sets the stage for a steady opening when Tuesday's night session begins. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, the 75% retracement level of the 2011-2012 rally crossing at 85.69 is the next downside target. Closes above the 20 day moving average crossing at 96.47 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 92.35. Second resistance is the 20 day moving average crossing at 96.47. First support is Wednesday's low crossing at 89.28. Second support is the 75% retracement level of the 2011-2012 rally crossing at 85.69.

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Natural gas closed lower on Friday and below the 10 day moving average crossing at 2.613 signaling that a short term top might be in or is near. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 2.492 would signal that a short term top has been posted. If June extends the rally off last week's low, February's high crossing at 3.040 is the next upside target. First resistance is last Friday's high crossing at 2.759. Second resistance is February's high crossing at 3.040. First support is the 20 day moving average crossing at 2.492. Second support is the reaction low crossing at 2.387.

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Gold closed higher due to short covering on Friday. The low range close sets the stage for a steady to higher opening when Tuesday's night session begins trading. Stochastics and the RSI are turning bearish signaling sideways to lower prices are possible near term. If June renews the decline off February's high, the 38% retracement level of the 2008-2011 rally crossing at 1487.50 is the next downside target. Closes above the 20 day moving average crossing at 1597.00 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1597.00. Second resistance is this month's high crossing at 1672.30. First support is last Wednesday's low crossing at 1526.70. Second support is the 38% retracement level of the 2008-2011 rally crossing at 1487.50.

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