Technical Oil (2011-01-31)

By @ibtimes on

Weekly Report January 31 / February 4 / 2011

The uptrend appearing through trading last Friday was technical due to the positive signs appearing through momentum indicators, as seen on the image above, and due to the tensions in the Middle East. According to the overall picture for crude movement, we find that the bearish butterfly pattern is still valid as it did not touch any target from this pattern. Hence, we expected crude to return to descend once again in an attempt to touch the first awaited target harmonic formation around 38.2% correction for the CD leg around $84.30 per barrel. Note that trading below 90.50 will strengthen chances of a bearish trend, while noting that the daily closing is above 92.60 could maintain this scenario intact.

The trading range for today is among the key support around 84.30 and the key resistance around 93.10.

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

Previous ReportSupport89.0588.8588.2087.2586.70Resistance90.0090.5091.3591.8592.60RecommendationBased on the charts and explanations above our opinion is selling crude around 90.00 targeting 84.30 and stop loss above 92.60, might be appropriate.

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