Wednesday, June 27, 2012

Commodities Get a Boost From New "It Isn't That Bad" Data in the U.S.

Crude oil closed higher due to short covering on Wednesday as it consolidates some of this spring's decline. The high range close sets the stage for a steady to higher opening when Thursday's night session begins. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that a low might be in or is near. Closes above the 20 day moving average crossing at 82.92 are needed to confirm that a low has been posted. If August extends this spring's decline, the 75% retracement level of the 2011-2012 rally crossing at 73.28 is the next downside target. First resistance is the 20 day moving average crossing at 82.92. Second resistance is the reaction high crossing at 87.32. First support is last Friday's low crossing at 77.56. Second support is the 75% retracement level of the 2011-2012 rally crossing at 73.28.

Natural gas closed higher on Wednesday as it extended this month's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If July extends this month's rally, February's high crossing at 3.104 is the next upside target. Multiple closes below the 20 day moving average crossing at 2.446 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 2.946. Second resistance is February's high crossing at 3.104. First support is the 10 day moving average crossing at 2.610. Second support is the 20 day moving average crossing at 2.466.

Gold closed higher on Wednesday and the high range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. If August extends last week's decline, May's low crossing at 1529.30 is the next downside target. Closes above the 20 day moving average crossing at 1602.30 are needed to temper the bearish outlook. First resistance is the 20 day moving average crossing at 1602.30. Second resistance is reaction high crossing at 1642.40. First support is the reaction low crossing at 1556.40. Second support is May's low crossing at 1529.30.

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