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Crude Oil Weekly Technical Outlook

Oil N' Gold Team from Oil N' Gold at 01/04/10


Nymex Crude Oil (CL)

Crude oil's rally from 68.59 extends further to as high as 81.16 so far and at this point, intraday bias remains on the upside for 82.0 resistance next. Recent development suggests that medium term rise from 33.2 is still in progress and bring of 82.0 high will bring rise resumption towards next key resistance level at 90. On the downside, below 79.12 minor support will turn intraday bias neutral and bring retreat, probably to 4 hours 55 EMA (now at 77.49). But break of 73.61 support is needed to indicate that crude oil has topped. Outlook short term outlook will now remain bullish.

In the bigger picture, the strong rally from 68.59 and sustained trading above 55 days EMA argues that whole medium term rise from 2009 low of 33.2 is still in progress for another high above 82.0. Above this 82.0 will target next key cluster resistance level at 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, we'll continue to look for reversal signal as rise from 33.2, which is treated as correction to whole fall from 147.27, is expected to conclude inside 76.77/90.24 fibo resistance zone. On the downside, though, break of 68.59 is needed to revive the case that crude oil has topped out in medium term. Otherwise, outlook will be neutral at worst even in case of deep pull back.

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.

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