Technical Oil (2010-02-18)

After building a base on support shown yesterday, crude settled at 77.50 and showed clear negative signs that pushed it once more towards the previously mentioned support level at 76.50; showing a bearish technical pattern formation that makes us expect a bearish intraday direction, starting from the breach of 76.50 and head towards the main target at 75.15. It is vital to mention that this suggested descend is considered to be normal trading within the present ascending channel and slightly bearishly correcting. Therefore, a possible bullish rebound is expected after touching the awaited target for today. The breach of 77.65 will help crude return to its bullish trend without needing to bearishly correct.

The trading range for today is among the key support at 74.55 and the key resistance at 78.60.

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

Previous Report Weekly ReportSupport76.5075.6075.1574.5573.65Resistance77.5078.0078.6079.5080.50RecommendationBased on the charts and explanations above our opinion is selling oil with the breach of 76.50 targeting 75.15 and stop loss above 77.50, might be appropriate.