Crude Oil Weekly Technical Outlook

Written by Oil N' Gold | Sat Aug 01 09 15:46 ET
Nymex Crude Oil (CL)

Crude oil's correction from 68.99 was contained above 62.44 cluster support (61.8% retracement of 58.32 to 68.99 at 62.39) as expected. Subsequent strong rally and break of 68.99 high indicates that rise from 58.32 has resumed and should now be targeting key cluster level at 73.38 with 100% projection of 58.32 to 68.99 from 62.7 at 73.36. While some retreat might be seen, break of 62.70 support is needed to indicate that rise from 58.32 has completed. Otherwise, short term outlook will remain bullish.

In the bigger picture, whole medium term rebound from 33.2 is likely still in progress as crude oil is still trading well inside rising channel from there. Current rise from 58.32 should be resuming such rebound and will likely make another high above 73.38, probably to 38.2% retracement of 147.27 to 33.2 at 76.77. But strong resistance will likely be seen as crude oil enters into 76.77/90.24 fibo resistance zone. Hence, we'd look for sign of reversal and loss of momentum as crude oil as the current rise continues. on the downside, break of 62.70 support will argue that crude oil has possibly topped out earlier than we expect and break of 58.32 support will now be an important signal that crude oil has already topped out.

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.