(Bloomberg) -- Crude oil, which fell from a 10- month high of $75 a barrel in New York last week, remains in an uptrend and a sustained move lower isn’t likely unless prices settle below $66, National Australia Bank Ltd. said. Oil may climb to its recent highs in coming weeks even as the volatility in prices reflected uncertainty among traders, according to Gordon Manning, a Sydney-based technical analyst. He correctly predicted Aug. 5 that the market wouldn’t settle below $66 a barrel on its way to a new high for 2009.“It’s not a downtrend in my books,” Manning said in a phone interview today. “It certainly hasn’t pushed on with the sort of aggression that I thought it might do, but there’s not enough damage to really get too worried.”
Oil slipped 1.6 percent last week after touching $75 a barrel on Aug. 25, the highest intraday price since October, as traders interpreted weaker equity markets as a sign global demand for fuels won’t recover anytime soon. The contract for October delivery on the New York Mercantile Exchange traded at $68.30, up 25 cents, at 12:11 p.m. in Singapore. Futures have gained 53 percent this year.On the weekly and daily continuation charts, the market is showing signs of a breakdown in the rally that started in February, Manning said. Prices yesterday fell to $68 a barrel, a two-week low, which represented a downside test of an ascending trend line.
“We are getting a bit of momentum failure on some of the indicators,” Manning said. “If we had a close under $66.50, that would move things a little bit more into the negative side. If that’s reached, there’s a risk that we would go back to the $58-$59 area.” Oil may stay volatile as traders take direction from benchmark indicators including the stock market’s Standard & Poor’s 500 Index, according to Manning. The index is in its longest losing streak since June.“There’s a question here as to whether the stock market is going to have a bigger correction and if it did, oil would drift lower,” he said.
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