Tuesday, June 12, 2012

Are Commodities Putting in a Bottom?

Crude oil closed higher due to short covering on Tuesday as it consolidates above the 87% retracement level of the 2011-2012 rally crossing at 81.36. The high range close sets the stage for a steady to higher opening when Wednesday's night session begins. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 88.25 are needed to confirm that a low has been posted. If July renews this spring's decline, last October's low crossing at 77.05 is the next downside target. First resistance is the reaction high crossing at 87.03. Second resistance is the 20 day moving average crossing at 88.25. First support is last Monday's low crossing at 81.21. Second support is last October's low crossing at 77.05.

Natural gas closed higher due to short covering on Tuesday as it consolidated some of the decline off May's high. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July renews the decline off May's high, April's low crossing at 2.136 is the next downside target. Closes above the 20 day moving average crossing at 2.515 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 2.515. Second resistance is May's high crossing at 2.838. First support is today's low crossing at 2.173. Second support is April's low crossing at 2.136.

Gold closed higher due to short covering on Tuesday as it extends the rebound off last Friday's low. The high range close sets the stage for a steady to higher opening when Wednesday's night session begins trading. Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1583.80 are needed to confirm that a short term top has been posted. If August renews the rally off May's low, April's high crossing at 1674.30 is the next upside target. First resistance is the reaction high crossing at 1632.00. Second resistance is May's high crossing at 1674.30. First support is the 20 day moving average crossing at 1583.80. Second support is May's low crossing at 1529.30.

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