Crude Oil Bulls Have the Advantage Despite Overbought Conditions

Crude oil closed lower on Monday while extending last week's trading range. The mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If December extends the rally off this month's low, the 50% retracement level of the May-October decline crossing at 95.32 is the next upside target. Closes below the 20 day moving average crossing at 87.00 are needed to confirm that a short term top has been posted.

First resistance is the 50% retracement level of the May-October decline crossing at 95.32
Second resistance is the 62% retracement level of the May-October decline crossing at 100.08

First support is the 20 day moving average crossing at 87.00
Second support is the reaction low crossing at 83.40


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