Weekly Report(12-16 September 2011): crude oil futures for October settlement
Oil remains confined within the main descending broadening wedge formation (colored in black) and below the 50, 200 moving averages, suggesting that the overall downside bias remains valid. Within the recent couple of weeks the commodity formed an upside biased consolidation illustrated on chart by a rising wedge formation (colored in red). The wedge formation suggests that the overall downtrend may continue and this will be confirmed by breaching the patterns' support level near 84.50-84.00 area, however 83.00 has proven pivotal, therefore, we will confirm bearishness for the rest of the week with a breach of 83.00.
The trading range for the week is among the major support at 75.00 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
|Recommendation||Based on the charts and explanations above we recommend selling oil around 86.50 targeting 84.50 and 83.00. Stop loss with four-hour closing above 87.50|