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Trading Oil Update – 15th September 2008

The technical picture is still pointing downwards, with yet another low (for the seventh consecutive day). With all the moving averages pointing lower and a somewhat relentless downward trend it is very hard to find levels where this market is likely to find support. Picking bottoms is a very dangerous game to play and I feel that we need a breakout above $103.62 in order to see a reversal of the short term downtrend. The short and medium term trends are bearish and the long term remains bullish.

  1. Support: $96.33 (Fridays low) Resistance: $103.62 (high of 09/09/08)
  2. Support: $95.19 (high of 07/11/07) Resistance: $102.76 (9 day moving average)
  3. Support: $92.83 (high of 31/01/08) Resistance: $99.44 (Fridays high)

Summary:

Friday’s activity was largely focussed on the approaching hurricane Ike, and its failure to reach category 3 status muted the buying somewhat. Nevertheless large selling of the dollar in the currency markets and the aforementioned hurricane have failed to force any short covering and it is hard to see what can reverse this current market trend. With news filtering through that supply has not been hugely affected as a result of the storm, oil has opened around a dollar weaker from Fridays close.