Short Term Bulls Slip Up in Crude Oil

WEEKLY CHART – CONTINUATION:

After a base formed below the key 50.00 area, the recovery came to a halt just ahead of the 38.2% retracement on this continuation chart.

We soon turned s/term bearish after this point (please refer to our 25th Jun Update).

DAILY CHART (NYMEX) – SEP-09:

Clear support from the Apr high and 50% pullback prompted a strong rally, which violated the 67.22 23-Jun low.

We have been assuming that this recovery would not last – currently there has emerged strong resistance from the 61.8% bounce level – we think there is a good chance that the 59.30 13-Jul low will come under pressure in due course.

The projected bull channel base at 57.25 currently, plus falling return line at 56.70, offers the next support – but there is also a lower Fibo projection which looks interesting – this will be shown in the next Commodity Guide.

Theoretical shorts at 66.60 in the Guide will now favour reducing stops to just above the 68.99 27-Jul high, say 69.25, still targeting 60.00 for partial profits.

Now finally a quick look at the Brent Crude chart…

DAILY CHART (BRENT CRUDE) – SEP-09::

The Brent contract has been stronger – the recent rebound failed just above the 76.4% bounce level.

Although not dramatic (a more decisive blow-off move is ideal) there was technically a Key Reversal Day on 29th Jun.

A break below the area of the 66.58 23-Jun low would be the next bear sign here.