Written by Oil N' Gold
Nymex Crude Oil (CL)
Crude oil continues to engage in choppy sideway trading below 75.0 and outlook remains neutral for the moment. Question is still on whether price actions from 75.0 are developing into sideway consolidation or a reversal. On the downside, break of 68.02 will build up the case that crude oil has indeed topped out at 75.0. In such case, fall from 75.0 should be resuming for 65.23 support and below. On the upside, above 73.16 will bring a retest of 75.0 high and break will confirm up trend resumption for 76.77 fibonacci level next.
In the bigger picture, there is no change in the view that rise from 33.2 is a correction to whole down trend form 147.27. Question remains on whether such rally has completed at 75.0 already and the signals are so far conflicting. On the one hand, crude oil is still trading above medium term rising trending and thus the rally is still intact. On the other hand, crude has clearly lost upside momentum as seen in bearish divergence conditions in daily MACD and RSI. We'll stay neutral and look forward to a breakout from recent range for guidance.
On the downside, note that a break of 67.05 support will indicate that fall from 75.0 is resuming. By that time, the medium term trend line should be taken out firmly and will solidify the case that rise from 33.2 has completed at 75.0. Deeper decline should then be seen in such case to 58.32 support for confirmation. On the upside, above 75.0 will confirm that rise from 33.2 is still in progress. Nevertheless, strong 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.
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