Crude succeeded in assuring the breach of the neckline for the bearish technical pattern shown yesterday at 78.00, where it achieved a daily close below; thus supporting the expected short term direction. Meanwhile, momentum indicators are showing oversold signs that might push crude to attempt some bullish correction which will retest the breached neckline and then reverse to resume its downside movement. From here we can expect a minor ascending correction and then a reversal to achieve a downside move over the short term intraday basis with primary targets around $75.00 per barrel. The expected bearish direction will prevail if the four hour close remains below 78.60.
The trading range for today is among the key support at 74.70 and the key resistance at 82.50.
The general trend is to the upside as far as 47.20 remains intact with targets at 85.00.
|Recommendation||Based on the charts and explanations above our opinion is selling oil at 78.00 and targeting 76.35 and stop loss above 79.05, might be appropriate.|