Weekly Report 17 - 21 / January / 2011

After crude exited the ascending short term channel, it started a bearish correction direction within the descending channel show above. Crude managed to touch last Friday's resistance level, reversing to the downside and making us expect a bearish direction for this week; primary targets are around 89.80 - 50% Fibonacci - then 61.8% 89.20 - 61.8% Fibonacci -. Stochastic is giving off oversold signs that will maintain fluctuation for some time between present levels supported by the MA 50 and descending channel's resistance level around 91.45. Note that the closing must remain above 91.45 to complete the bearish correction and help crude return within the key bullish trend.

The trading range for this week is among the key support around 88.20 and the key resistance around 93.65.

The short term trend is expected towards the upside as long as trading is above 84.00 with targets at 99.00.

Previous Report

RecommendationBased on the charts and explanations above our opinion is selling crude around 91.45 targeting 89.20 and stop loss above 92.35, might be appropriate.