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Crude Oil Weekly Technical Outlook

Oil N' Gold Team from Oil N' Gold at 11/14/09


Nymex Crude Oil (CL)

After some initial choppy sideway consolidation, Crude oil's fall resumed last week and dipped to as low as 75.57, just inch above 38.2% retracement of 65.05 to 82 at 75.53. Initial bias will remain on the downside this week and further fall should be seen to 61.8% retracement at 71.52. On the upside, while some recovery might be seen, short term outlook will remain bearish as long as 80.51 resistance holds.

In the bigger picture, we'd continue to slightly favor the bearish case as long as 80.51 resistance holds. That is, a medium term top is formed at 82.0 on bearish divergence conditions in daily MACD as whole rise from 33.2 has completed. Break of trend line support (now at 69.39) will add more credence to this case and bring deeper fall to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. However, break of 80.51 will indicate that price actions from 82.0 are merely consolidations in the medium term rise only. FUrther break of 82.0 will bring medium term rise resumption. However, as we expect such rise to conclude inside resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2), focus will remain on loss of momentum and reversal signal even in case of another rise.

.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 there 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

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