Morning Report for Crude Oil Futures for July Settlement

By stability below 98.00 it's possible that a new butterfly pattern is underdevelopment and oil now is forming the CD leg of the pattern as shown in image. While forming the CD leg it will achieve the extended targets of the Bat pattern, where the first potential reversal zone of the butterfly coincide with the 127% extended target of the CD leg of the Bat pattern, to summarize, we expect downside movement for today, while stability below 98.00 is necessary to keep our expectations possible. Momentum indicators are oversold and this may result in big fluctuations during the downside movement.

The trading range for today is among the major support at 94.45 and the major resistance at 100.70.

The short term trend is to the downside with steady daily closing below 109.75 targeting 85.40.

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RecommendationBased on the charts and explanations above our opinion is selling crude around 98.00, and take profit in stages at 96.60 and 94.45. Stop loss with daily closing above 99.40 might be appropriate for today