Nymex Crude Oil (CL)
Crude remains soft today and continues to stay in tight range. While downside momentum might be diminishing with 4 hours MACD staying above signal line, further decline is still in favor as long as 61.57 resistance holds. Next target will be key resistance turned support at 54.66. On the upside, above 61.57 minor resistance will indicate that a short term bottom might be formed with mild bullish convergence condition in 4 hours MACD. Some consolidation should then be seen but recovery is expected to be be limited by double top neckline at 66.2 bring fall resumption.
In the bigger picture, the break of medium term channel support last week confirmed that rise from 33.2 has completed at 73.83 already, ahead of 38.2% retracement of 147.27 to 33.2 at 76.77. The three wave structure of the rise from 33.2 to 73.83 suggests that it's corrective in nature. In addition, Crude oil failed to sustain above both 55 weeks and 55 months EMA. Hence, such rise from 33.2 to 73.83 is treated as a correction in the larger fall from 147.24 only. Decline from 73.83 is now expected to extend further to a new low below 33.2. On the upside, break of 66.2 resistance is at least needed to indicate that fall from 73.83 has completed and revive the possibility that rise from 33.2 is still in progress. Otherwise, outlook will remain bearish.
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