Monday, June 4, 2012

Crude Oil Bulls Get Some Help From 87% Retracement Level

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Crude oil closed higher due to short covering on Monday as it bounced off 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 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, last October's low crossing at 77.05 is the next downside target. Closes above the 20 day moving average crossing at 92.14 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 88.86. Second resistance is the 20 day moving average crossing at 92.14. First support is today's low crossing at 81.21. Second support is last October's low crossing at 77.05.

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Natural gas closed higher due to short covering on Monday as it consolidated some of last week's decline. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends last week's decline, the reaction low crossing at 2.166 is the next downside target. Closes above the 20 day moving average crossing at 2.576 would confirm that a short term low has been posted First resistance is the 20 day moving average crossing at 2.576. Second resistance is the reaction high crossing at 2.838. First support is last Friday's low crossing at 2.313. Second support is the reaction low crossing at 2.166.

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Gold closed lower on Monday as it consolidates some of last Friday's rally. The low range close sets the stage for a steady to lower opening when Tuesday's night session begins trading. Stochastics and the RSI remain bullish signaling sideways to higher prices are possible near term. If August extends last Friday's rally, April's high crossing at 1674.30 is the next upside target. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. First resistance is last Friday's high crossing at 1632.00. Second resistance is April's high crossing at 1674.30. First support is the reaction low crossing at 1529.30. Second support is the 75% retracement level of the 2010-2011 rally crossing at 1461.30.

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