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Technical Oil
Written by article default Monday, 08 August 2011 09:06
Weekly Report (08-12 August, 2011) for Crude Oil Futures for September Settlement
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After ending the week at 87.00 and below very important technical levels such as the 52 Weeks SMA and the long term trend line shown on the chart, the commodity started the week with a two dollar bearish gap, to continue its journey towards the latest low near 82.80. Stability below 85.00 may confirm more selloff initially towards 80.00 however stabilizing above 85.00 again may push oil to retest 89.00 area. The bearishness is clear, however, the downside move may halt at levels near 80.00 which is a strong psychological level. To summarize, we expect the bearishness to dominate this week so long as oil is below 85.00, stabilizing above 85.00 may lead to deeper corrections.
Trading range for the week is among the major support at 78.00 and the major resistance at 89.60.
The short term trend is to the downside with steady daily closing below 100.00 targeting 65.00.
| Support | 82.80 | 82.00 | 81.50 | 81.00 | 80.00 |
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| Resistance | 85.00 | 85.30 | 86.00 | 86.40 | 87.00 |
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| Recommendation | Based on the charts and explanations above we recommend selling oil around 85.35 targeting 82.00 and 80.00. Stop loss with four-hour closing above 86.30 may be appropriate | ||||