Crude Oil Bulls Awake After $50 Break
20 March 2009
In recent issues of the Commodity Trading Guide we have been talking about the possibility of a re-awakening of the Crude Oil bulls, but we have patiently awaited the technical signal that sounded the first alarm bell. It is now ringing.
WEEKLY CHART – CONTINUATION: The continuation chart, since late last year, has been trying to base. It had found good resistance from the important 49.90 Jan-07 low. This 50 area was seen as key, and a trigger for a bull stance. See Daily chart…
DAILY CHART – MAY-09: The downtrend had slowed, but we needed to see a close above 50 in order to adopt a fairly aggressive bull stance. This has now happened. Nearby hurdles come from the small bear channel top projection around 56.00 and then the 58.31 06-Jan high. Some sort of pullback would be in order before our first target of the 23.6% 64.74 level is tested (later target around 80, the 38.2% mark). Speculative buyers will probably await modest dips, initial stops favoured just below the 39.42 19-Feb low, targeting 64.00/64.74 for partial profits. Note that there will remain a reasonable bear risk while those 56.00-58.31 resistances aren’t breached.
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