Written by Oil N' Gold | Sat Aug 08 09 05:53 ET
Nymex Crude Oil (CL)
Despite edging higher to 72.84, crude oil started to lose momentum as it approaches 73.36/38 key resistance level (100% projection of 58.32 to 68.99 from 62.7 at 73.36) and turned into sideway consolidation. We'd continue to stay neutral as long as crude oil remains in range of 69.70/73.38. Below 69.70 will turn intraday bias to the downside for deeper pull back. But after all, we'd expect downside to be contained above 62.70 and bring another rise that eventually send crude oil above 73.38 level. On the upside, sustained break of 73.36/38 will confirm rally resumption towards 38.2% retracement of 147.27 to 33.2 at 76.77.
In the bigger picture, with crude oil staying inside medium term rising channel, we're still favoring the case that whole rise from 33.2 is still in progress. Hence, another rise rise towards 38.2% retracement of 147.27 to 33.2 at 76.77 is expected. But after all, strong resistance is expected as crude oil enters into 76.77/90.24 fibo resistance zone and bring reversal finally. On the downside, break of 62.70 support will argue that crude oil has possibly topped out earlier than we thought and break of 58.32 support will now be an important signal that rise from 33.2 has completed.
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.
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