Crude Oil Weekly Technical Outlook

Oil N' Gold Team from Oil N' Gold at 02/13/10

Nymex Crude Oil (CL)

Crude oil's rebound from 69.50 extended further to as high as 75.69 last week but last momentum since then. With 4 hours MACD crossed below signal line, intraday bias is turned neutral. Break of 72.60 minor support will indicate that such recovery has completed and will flip intraday bias back to the downside for 69.50 support first. Break will confirm resumption of the whole fall from 83.95 towards next key support at 68.59. On the upside, above 75.69 will turn focus to 78.04 minor resistance. Break there will argue that whole fall from 83.95 has finished and will bring stronger rebound instead.

In the bigger picture, prior break of medium term trend line support added much credence to the case of reversal. Medium term rise from 33.2, which is treated as a correction to fall from 147.27, should have completed at 83.95 already, on bearish divergence condition in daily MACD. Current fall from 83.95 should extend through 68.59 support towards next key cluster level at 58.32 (50% retracement of 33.2 to 83.95 at 58.58). Decisive break there will strongly suggest that whole decline from 147.27 is resuming for a new low below 33.2. On the upside, break of 78.04 resistance is needed to confirm that fall from 83.95 has completed. Otherwise, outlook will remain bearish.

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.

Nymex Crude Oil Continuous Contract Charts