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Technical Oil
Written by article default Monday, 12 September 2011 09:41
Weekly Report (12-16 September 2011): Crude oil futures for October settlement
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Oil remains confined within the main descending broadening wedge formation (colored in black) and below the 50 & 200 moving averages, suggesting that the overall downside bias remains valid. Within the recent couple of weeks the commodity formed an upside biased consolidation illustrated on chart by a rising wedge formation (colored in red). The wedge formation suggests that the overall downtrend may continue and this will be confirmed by breaching the patterns' support level near 84.50-84.00 area, however 83.00 has proven pivotal, therefore, we will confirm the bearishness for the rest of the week with a breach of 83.00.
The trading range for the week is among the major support at 75.00 and the major resistance at 91.00.
The short-term trend is to the downside with steady daily closing below 100.00 targeting 65.00
| Support | 85.50 | 84.50 | 83.00 | 81.20 | 80.00 |
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| Resistance | 87.50 | 89.00 | 90.00 | 91.00 | 92.00 |
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| Recommendation | Based on the charts and explanations above we recommend selling oil around 86.50 targeting 84.50 and 83.00. Stop loss with four-hour closing above 87.50 | ||||
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