Weekly Report18 -22 / 1 / 2010

Crude is moving to the downside in an organized way after recording high from $84.00 per barrel to start a bearish correction that we think will reach 76.4% Fibonacci correction; meeting with main support for the bullish short term direction. This descend is supported by the breach of the neckline for the bearish technical pattern at 78.65. We expect that the positive signs that momentum indicators are showing will push the pair to retest this breach. From here, we expect the expected direction for this week to be bearish on the overall; targeting $73.70 per barrel and require the daily closingbelow 80.50.

The trading range for today is among the key support at 73.70 and the key resistance at 82.25.

The general trend is to the upside as far as 47.20 remains intact with targets at 85.00.

Support77.1076.6075.6074.0073.70
Resistance78.6579.5580.5081.3582.25
RecommendationBased on the charts and explanations above our opinion is selling oil with the breach of 78.65 targeting 75.60 and stop loss above 80.50, might be appropriate.