Morning Report for Crude Oil Futures for September Settlement

The commodity is range-trading but with an upward bias, it pulled back yesterday to trigger our long and quickly rebounded to the upside again to reach our target near 87.50. Examining the daily chart again we find that a potential broadening wedge formation may be in progress where target for the upside wave may be near the descending resistance of the pattern around 94.00, however we need to reach 90.00 area first and surpass it to confirm more bullishness, trading remains above important support areas and MACD has just crossed over positively, therefore, we hold onto our bullish expectations for oil so long as trading is above 83.00 over daily basis.

Trading range for the day is among the major support at 83.00 and the major resistance at 91.00.The short term trend is to the downside with steady daily closing below 100.00, targeting 65.00.

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RecommendationBased on the charts and explanations above we recommend buying oil around 85.70 targeting 87.50 and 89.60. Stop loss with four hour closing below 84.80 may be appropriate.