Crude Oil Chart Weekly 18 Jan 2010
Crude oil prices closed last week’s trading session significantly lower and from a technical perspective on the weekly chart with a wide spread down candle, but one which seems to be finding some support from the combined 9 and 14 week moving averages. However, more importantly this candle has now provided a bearish engulfing signal suggesting that we could see a further fall in daily oil prices as a result. The depth of this reversal lower will be governed by the potential support now immediately below in the $76.50 to $70 price region and any breach of this level could herald the start of a significant move lower. This analysis is further confirmed by the fact that the bearish engulfing candle could also be considered as an “outside day” and as such a further indication of lower prices. The key indicator for the longer term is the 40 week moving average which thus far is providing the technical support for daily prices as they continue to try and grind ever higher. From a fundamental perspective oil prices are still suffering from the oversupply and falling demand as evidenced in last week’s oil stats plus the oil market will be watching this week’s earnings report for confirmation that the recent economic recovery is likely to continue.
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Support & Resistance for weekly WTI oil contract :
S1: 75.87 R1: 82.15
S2: 73.64 R2: 86.20
S3: 69.59 R3: 88.43
