Crude Oil Weekly Technical Outlook

Written by Oil N' Gold | Sat Aug 22 09 17:38 ET
Nymex Crude Oil (CL)

Despite edging lower to 65.23, crude oil rebound strongly from there and has taken out 73.38 high to resume whole medium term rebound from 33.2. Initial bias remains on the upside this week and further rise should now be seen to key long term fibonacci resistance at 76.77 (38.2% retracement of 147.27 to 33.2). On the downside, below 71.75 minor support will turn intraday outlook neutral first and bring consolidation. But downside short term outlook will remain bullish as long as 65.23 support holds.

In the bigger picture, last week's development invalidated that view that crude oil has topped out in medium term and indicates that rise from 33.2 is still in progress instead. Nevertheless, there is no change in the view that such rise from 33.2 is a correction to whole down trend form 147.27. Hence, stronger resistance is expected as crude oil enters into 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) and bring reversal finally. On the downside, break of 65.23 support will now be an important signal that crude oil has already topped out and will turn focus back to 58.32 key support for confirmation.

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.