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Technical Oil
Written by article default Monday, 24 January 2011 15:21
Oil ReportMidday Report
Crude did not ascend before moving to the downside due to the bearish harmonic butterfly pattern, which pushed crude to breach the upside trend’s key support level, seen above (we recommend reviewing our weekly report for more details regarding the bearish butterfly pattern). The negative effect of this breach is still valid, which could cause more bearish movement to test areas around 87.30 shown above. We hold onto our weekly expectations, but expect a drop before the expected bullish correction; note that the breach of 87.30 and stability below it could trigger a new bearish wave and offset the need for an upside correction.
The trading range for today is among the key support around 86.05 and the key resistance around 90.50.
The short term trend is expected towards the upside as long as trading is above 84.00 with targets at 99.00.
| Support | 88.20 | 87.80 | 87.30 | 86.70 | 86.05 |
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| Resistance | 88.85 | 89.05 | 89.85 | 90.00 | 90.50 |
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| Recommendation | Based on the charts and explanations above our opinion is selling crude around 89.05 targeting 87.30 and stop loss with four-hour closing above 89.85, might be appropriate. | ||||