Crude Oil and Natural Gas Technical Outlook For Friday Morning

Nymex Crude Oil (CL)

Crude oil fall sharply to as low as 72.39 today and the development is inline with our bearish view that fall fro 82.00 is still in progress. Intraday bias remains on the downside for 61.8% retracement of 65.05 to 82 at 71.52. Sustained break there will pave the way for even deeper decline to 65.05 support next. On the upside, while some recovery might be seen, upside should be limited by 75.57 support turned resistance and bring fall resumption.

In the bigger picture, we'd continue to slightly favor the bearish case as long as 80.51 resistance holds. That is, a medium term top is formed at 82.0 on bearish divergence conditions in daily MACD as whole rise from 33.2 has completed. Break of trend line support (now at 70.60) will add more credence to this case and bring deeper fall to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. However, break of 80.51 will indicate that price actions from 82.0 are merely consolidations in the medium term rise only. Further break of 82.0 will bring medium term rise resumption. However, as we expect such rise to conclude inside resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2), focus will remain on loss of momentum and reversal signal even in case of another rise.....Here is the charts!

Nymex Natural Gas (NG)

Natural gas retreat mildly after the rise from 4.157 was limited below 5.318 resistance. With 4 hours MACD crossed below signal line, intraday bias is turned neutral again. Some more consolidations would be seen between 4.157 and 5.318. Nevertheless, note that break of 5.318 resistance will confirm that whole rally from 2.409 has resumed and should target 61.8% projection of 2.409 to 5.318 from 4.157 at 5.955 next.

In the bigger picture, current development suggests that price actions from 5.318 are merely consolidations and should have completed at 4.517 already. Rise from 2.409, which is still in progress and will likely extend to 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.157 support will indicate dampen this bullish case and turn outlook mixed.....Here is the charts!

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