Weekly Commodity Technical Focus

ONG Focus - Written by Oil N' Gold |

Nymex Crude Oil (CL)
Crude oil's rebound from 65.05 extended further to as high as 69.93 last week and the strength of the rebound mixed up the near term outlook. With 4 hours MACD crossed below signal line, initial bias is neutral this week. On the downside, below 68.10 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will affirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next.

On the upside, above 69.93 will target 73.16 first. Break there will indicate that fall from 75.0 has completed at 65.05 already. the corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion.

In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0. Nevertheless, risk remains on the downside as long as 73.16 resistance holds. A break below 65.05 support will solidify the case the crude oil has topped out in medium term again. In such case, deeper fall should be seen to test on 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) first and break will target a retest of 33.2 low. However, a break of 75.0 will indicate that rise from 33.2 has resumed for 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) instead.

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 even in case of another rise and bring reversal for another low below 33.2 before completing the whole correction from 147.27.

Comex Gold (GC)
Gold continued to engage in choppy sideway trading below 1025.8 last week, without making any progress. Further consolidation could still be seen with risk of another fall. Though, downside is expected to be contained by 61.8% retracement of 931.3 to 1025.8 at 967.4. However, note that 1033.9 is needed to be firmly taken out to confirm upside momentum. Otherwise, we'd expected more sideway trading below 1033.9 in near term.

In the bigger picture, as discussed before, rise from 681 is tentatively treated as resumption of long term up trend. Sustained break of 1033.9 high will confirm this case and should target 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 next. However, a strong break of 931.3 support will invalidate this bullish view and suggest that rise from 681 has completed. This will in turn indicate that such rise is merely part of the consolidation pattern that started at 1033.9. In other words, deeper fall could then be seen towards 681 key support level in such case.

In the long term picture, long term rally from 1999 low of 253 turned into consolidation after completing a five wave sequence to 1033.9 in 2008. Such consolidation from 1033.9 should have completed in form of expanding triangle to 681 already and rise from there is tentatively treated as resumption of the long term up trend. Sustained break of 1033.9 should confirm this case and target 61.8% projection of 253 to 1033.9 from 681 at 1160 and then 100% projection at 1460 level.