Crude Oil Bulls Regain Clear Near Term Advantage

Crude oil closed sharply higher on Tuesday as it extends the rally off this month's low. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If March extends this month's rally, the reaction high crossing at 78.04 is the next upside target. First resistance is today's high crossing at 77.28. Second resistance is the reaction high crossing at 78.04. First support is last Friday's low crossing at 72.66. Second support is this month's low crossing at 69.50.

Natural gas closed lower on Tuesday as it extended this month's trading range. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain neutral to bullish hinting that sideways to higher prices are possible near term. Closes above the reaction high crossing at 5.680 or below 5.060 are needed to confirm a breakout of the aforementioned trading range. First resistance is today's high crossing at 5.556. Second resistance is last Monday's high crossing at 5.680. First support is last Friday's low crossing at 5.204. Second support is January's low crossing at 5.060.

The U.S. Dollar closed sharply lower on Tuesday and below the 10 day moving average crossing at 80.15 signaling that a short term top has likely been posted. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are diverging and are neutral signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 79.50 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 50% retracement level of the 2009-2010 decline crossing at 81.32 is the next upside target. First resistance is last Friday's high crossing at 80.83. Second resistance is the 50% retracement level of the 2009-2010 decline crossing at 81.32. First support is today's low crossing at 79.68. Second support is the 20 day moving average crossing at 79.50.

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