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Daily oil prices on Friday, once again staged a strong recovery from their recent sharp sell off, with the daily candle ending the session as a wide spread up bar, and with minor shadows to both top and bottom. Most significantly the close of the session managed to break and hold above the 14 day moving average suggesting that the hammer candle of Monday, has been confirmed and validated, and that we should expect to see a further rise in oil prices in due course. However before we become too optimistic, there are several targets that need to be achieved before we see a re-test of the $70 per barrel price point once again. The first of these is a breach and hold above the 40 day moving average which is a key technical indicator, and secondly we will need to see the resistance now immediately ahead in the $67 to $68 level, broken, with oil prices holding firm above this level. Should the two factors outlined above combine, then we should see further run higher to test the strong resistance at the $70 - $73 price handle in the medium term. Naturally many other factors will pay an increasingly important role in this picture, not least the take up of gasoline during the US driving season, the ongoing performance of equity markets and their relationship to the US dollar, and finally the forthcoming hurricane season will no doubt play its part in due course as we move forward into the second half of the year. Given these factors this week's oil stats will be watched particularly closely and with over 75% of corporate earnings still to come we can be sure that markets will continue to be volatile as investors flip flop between risk appetite and risk aversion. In addition if the weathermen are correct it seems we may see the return of El Nino where weather patterns are disrupted and commodity prices are affected. More in later posts. Overall crude oil prices reached an inter day high of $65.00 per barrel before ending the day at $64.44.
The short term is bullish, the medium term sideways, the long term bullish.
WTI:
Support: $62.78 (14 day moving av) Resistance: $66.81 (high of 06/07/09)
Support: $62.10 (low of 17/07/09) Resistance: $66.21 (high of 2 8/05/09)
Support: $61.46 (low of 16/07/09) Resistance: $65.81 (high of 07/07/09)
OIL (BRENT):
Support: $62.81 (Friday’s low) Resistance: $68.55 (high of 02 /06/09)
Support: $62.59 (low of 7/07/09) Resistance: $68.03 (high of 01/06/09)
Support: $61.78 (low of 28/05/09) Resistance: $67.13 (high of 03/07/09)
