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Daily Oil Prices Analysis 13 Sep 2010

crude oil trading

As daily oil prices attempt to cling to their recent gains  the commodity continues to trade in a narrow range oscillating between $70 per barrel to the downside and $85 to the upside, where prices have remained stagnant for almost a year.  Indeed the weekly chart gives us a clear picture of this price action with all four moving averages now heavily intertwined and with the trading channel clearly defined having first being initiated in October 2009.  Over the past 4 weeks we have seen two deep hammer candles and last week’s attempt to rise came as no great surprise following these strong trading signals.  As such we can expect to see daily oil prices rally further and will no doubt run out of steam either at the previous high of July at $82.97 or possibly even re-test the high of the channel at $87.14.  In either case we should see a rise in daily oil prices in due course but the extent of any rally is likely to be muted and only when a break out occurs to the upside can we begin to trade the commodity as a longer term trend rather than at present which is purely on a swing trading basis.

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