Sunday, June 5, 2011

WTI Crude Oil Daily Chart Weekend Look Ahead 6/5

(Chart 1 - WTI Crude Daily ZOOM)
(Chart 2 - WTI Crude Daily)

As expected, crude oil is making a battle around the $100/barrel level.

It looks like it is starting to form the 2nd shoulder of a head and shoulders (H&S) pattern.
The light blue bullish uptrend was in place well before this H&S developed.
However, it tracks the "neckline" of the H&S perfectly.

This line, as well as the midpoint of the current bearish channel (magenta dotted line), provided good support on Friday. We then rallied back over 100.

I personally sold this rally and feel crude will hold under 101. I need to see it close under the light blue uptrend line before a close over 101. Should this happen, I look for a test of the 95-96 area that has shown tremendous buying strength in the past. However, I feel if we get there again, we will get through it and test roughly 92.50. Also, I think if we get to 94 or less, any subsequent rally can be sold with 95-96 being very strong resistance.

No comments:

Post a Comment