Technical Recap
Bulls really controlled the action last week beginning with a boost off of the 200-day moving average followed by reinforced settlements above the crucial $72.50 benchmark area. Prices trended higher for the week through Thursday to $75.70 before pulling back on Friday on a round of profit taking ahead of the 50 and 100-day moving averages. The market closed firm on the week just above the 7-week dowtrend channel at $74.00 level with a minor uptrend potentially developing early this week.
We are still maintaining settlements below the broken key longer term Quarterly trend lines at the $77.00 to 78.00 range leaves the market vulnerable to renewed selling. With options expiration on Today (Wednesday), we anticipate rallies early this week, and then begin fade against $78.00 to 80.00 leading to a turnover later in the week.
Technical Outlook
Upside:
The market reversed the 7-week downtrend to start the week off rallying off the $74.00 level on Tuesday. Maintaining settlements above $74.00 to 75.00 supports advances this week targeting the key broken Quarterly trends in the $77.00 to 78.00 range. Trade or settlements above $78.00 brings the $80.00 psychological mark easily in range for the week. Any settlements above $80.00 will provide solid Bullish reinforcement with the potential to propel the market back to the Jan 2010 highs at $84.00. If momentum fades out in the $77.00-78.00 range, longs should cover all positions.
Downside:
Failing rallies at the $77.00-78.00 range generates a sell signal for an initial drive back to the broken 7-week downtrend at $74.00. Settlements below $74.00 reinforces short term weakness as it puts prices back the weekly downtrend channel while violating the minor daily uptrend. The objective below $74.00 is placed at the key $72.50-71.75 Support range where shorts should initially scale back positions. Trade and settlements below $72.50-71.75 will rekindle sustainable Bear forces triggering sell offs targeting the current 2010 lows at $70.00 to 69.50 while bringing the next major objective in range at $68.50-68.00. A settlement below $70.00 on the week, or trade that takes out the $68.00 level, lines up for $65.00 oil in the coming weeks.
Whats Making the News
- Crude futures ended sharply higher Tuesday as investors bet that Greece’s debt problems wouldn’t spill over to dent demand for commodities. Light, sweet crude for March delivery settled up $2.88, or 3.9%, at $77.01 a barrel on the New York Mercantile Exchange in its biggest one-day gain since Sept. 30. Brent crude on the ICE futures exchange settled $3.17, or 4.4%, higher at $75.68 a barrel.
- Crude oil prices were higher Tuesday after a new report showing that manufacturing activity is on the rise in the New York region and on a weaker US dollar that made purchases in other currencies cheaper for buyers.
- With no indication of a fuel price hike happening in the near future, the public sector oil refiners are hoping that crude prices do not spin out of control in 2010-11. Refiners still hope Crude Oil will stay at $75 in 2010-2011.
- Bharat Petroleum Corp (BPCL) bought 1 million barrels each of Algerian and Libyan crude in a tender for oil loading in April, trade sources said on Tuesday.
- Euro hits a high for the day at 1.3730 cable briefly breaks 1.5700 on the back of higher oil prices, now at 77.15
Popularity: 30% [?]
