Crude Oil Weekly Technical Outlook

Written by Oil N' Gold
Nymex Crude Oil (CL)

Crude oil engaged in choppy sideway trading last week but closed below 70 level eventually. While 66.79 support remains intact, daily MACD is now staying well below signal line and crude oil has also broken near term trend line support decisively. The development suggests that a short term top should be formed at 73.23 and hence, we'd favor downside in near term, targeting 38.2% retracement of 45.44 to 73.23 at 62.61. On the upside, though, above 72.55 minor resistance will argue that recent rally is still in progress and should target 38.2% retracement of 147.27 to 33.2 at 76.77 before topping.

In the bigger picture, while a short term top might be formed at 73.23, there is no indication that rise from 33.20 has completed yet. Such rise is still in favor to extend to 38.2% retracement of 147.27 to 33.2 at 76.77, and possibly further to next key level of 90, (50% retracement of 147.27 to 33.2 at 90.23) . But as noted before, strong resistance should be seen there and at least from some deep pull back. Though, a break of 54.66 key medium term resistance turned support will argue that whole rise from 33.2 low has indeed completed and will turn outlook bearish for a retest of this low eventually.

In the long term picture, note that fall from 147.27 is treated as a correction, or part of the correction/consolidation to the five wave sequence from 98 low of 10.65. Downside target of 17.12/37.0 support zone is already met and the correction might have completed already. Sustained trading above mentioned 55 weeks and 55 months EMA will add some credence to this case and should target next key level of 90, (50% retracement of 147.27 to 33.2 at 90.23). This will remain the preferred case as long as crude oil continues to stay above 54.66 support.