What do you follow, the fundamentals....the charts....or both?

Why is it that the fundamentals don’t match the charts? The stock market is a forward looking instrument. It forecasts how businesses are going to be months into the future. You only have to look back in the first quarter of 2009 to see how the fundamentals looked terrible, yet the charts pointed to better days ahead. What do you follow, the fundamentals or the charts, or both?

And what do both tell us when looking at this crude oil market. We believe the low seen yesterday on the May contract around the $102 area is going to be an important support level for this market. We are looking for the May contract to continue to consolidate around current levels and eventually move up to the $108 area, where it should find resistance.

We continue to like the long term chart formation which we believe will eventually push this market higher. We are still looking for crude oil to make its lows probably somewhere in the April-May period and then we expect that the downside pressure in this market to come to an end. Long term traders should remain long this market with appropriate money management stops.

Tuesdays action finished up with crude oil [May contract] closing lower due to profit taking as it consolidated some of Monday's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are turning neutral hinting that a low might be in or is near.

Closes above the reaction high crossing at 108.70 are needed to confirm that a short term low has been posted. If May renews last week's decline, the 38% retracement level of the October-March rally crossing at 97.84 is the next downside target.

First resistance is the broken October-February uptrend line crossing near 106.27. Second resistance is the reaction high crossing at 108.70. First support is Monday's low crossing at 102.06. Second support is the 38% retracement level of the October-March rally crossing at 97.84.

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Crude Oil Weekly Technical Outlook For Sunday March 18th

From the staff at Oil N Gold.......

Crude oil dripped to 103.78 last week as consolidation from 110.55 extended but quickly recovered. Such consolidation might have completed already. Initial bias is mildly on the upside this week for retest of 110.55. Break will confirm resumption of recent rally and should target 114.83 key resistance next. On the downside, though, below 103.78 will extend the correction to 61.8% retracement of 95.44 to 110.55 at 101.21.

In the bigger picture, the medium term up trend from 33.2 shouldn't be completed yet. Rise from 74.95 is indeed tentatively treated as resumption of such rally. Sustained break of 114.83 will target 61.8% projection of 33.2 to 114.83 from 74.95 at 125.40. On the downside, though, break of 95.44 support will indicate that correction pattern from 114.83 is going to extend further with another falling leg to 74.95 and below before completion.

In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.

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ONG: Crude Oil Weekly Technical Outlook For Sunday Jan. 8th

Crude oil rose further to as high as 103.74 last week but failed to sustain above 103.37 resistance and retreated. Initial bias remains neutral this week for some consolidations first. Nonetheless, near term outlook will remain bullish as long as 98.30 minor support holds. We'd expect rise form 74.95 to resume sooner or later. Above 103.74 will target 114.83 key resistance next. Though, break of 98.30 will dampen this bullish view and turn bias back to the downside for 92.52 support instead.

In the bigger picture, recent development indicates that pull back from 114.83 was completed at 74.95 already and medium term rally from 33.2 is not finished yet. We'd tentatively treat rise from 74.95 as resuming of such rally. Sustained break of 114.83 will target 61.8% projection of 33.2 to 114.83 from 74.95 at 125.40. On the downside, though, break of 92.52 support will indicate that correction pattern from 114.83 is going to extend further with another falling leg to 74.95 and below before completion.

In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

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Crude Oil Thursday Evening Trading

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