Rumor of Strategic Oil Reserves Being Released Push Market Lower

As we have stated before the 104 area is an area of support for the April contract. Today’s non announcement rumor of strategic oil reserves being released by Britain and the US push this market down to the 104 support level. We still believe that this market is going to move higher.

We continue to like the chart formation which we believe will eventually push this market higher until early April. We are looking for crude oil to make its highs probably somewhere in the April May period.

With a trading score of -70 we believe this market is regrouping to move higher later in the month. With our monthly trade triangles in a positive mode, we expect to see further gains in crude oil. Long term traders should be long this market with appropriate money management stops.

Crude oil [April contract] closed lower on Thursday as it extends the trading range of the past two weeks. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain bearish hinting that a short term top might be in or is near.

Closes below last Wednesday's crossing at 104.35 are needed to confirm that a short term top has been posted. If April renews this winter's rally, the 2011 high crossing at 114.09 is the next upside target.

First resistance is this month's high crossing at 110.55. Second resistance is the 2011 high crossing at 114.09. First support is today's low crossing at 103.78. Second support is the reaction low crossing at 97.73.

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