Crude oil failed to take out 83.16 resistance last week and subsequent sharp fall is inline with our view that more consolidation would be seen. Initial bias is mildly on the downside this week for 38.2% retracement of 69.50 to 83.16 at 77.94. But downside should be contained there and bring resumption of rally from 69.50. Break of 83.16 will target 83.95 high. However, note that sustained trading below 77.94 will argue that rise from 69.50 is completed and deeper fall would possibly be seen to retest this support.
In the bigger picture, crude oil is still trading well inside medium term rising channel and the rise from 33.2 might still be in progress. Nevertheless, as such rise from 33.2 is treated as a correction to whole decline from 147.27 only, even in case of another high above 83.95, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, though, break of 69.50 support will now indicate that crude oil has topped out in medium term already and turn outlook bearish.
In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that, strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
What are you waiting for....Here is 10 FREE Trading Lessons!
Share
No comments:
Post a Comment