Crude Oil Weekly Technical Outlook For Saturday Oct. 2nd

Crude oil's rise from 72.75 accelerated to as high as 81.75 last week and the development suggests that whole rise from 70.76 is not corrective in nature. In other words, rise from 70.76 is resuming whole rebound from 64.23 and should extend beyond 82.97 resistance. Initial bias is on the upside this week and further rise should be seen to 161.8% projection of 70.76 to 78.04 from 72.75 at 84.53. On the downside, below 79.70 will turn intraday bias neutral and bring consolidations. But downside should be contained by 4 hours 55 EMA (now at 77.32) and bring another rise.

In the bigger picture, the stronger than expected rally from 70.76 dampened the immediate bearish view and suggests that rise from 64.23 is still in progress. Nevertheless, we're still favoring the case that medium term rally from 33.2 is already completed at 87.15. Hence, strong resistance should be seen as crude oil enters into resistance zone of 82.97/87.15 and bring reversal. We're still expecting another fall to 60 psychological level (50% retracement of 33.2 to 87.15 at 60.18).

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall from 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.

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