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Crude Oil Price 29 Oct 2010

oil price graph

The crude oil price for the WTI contract ended yesterday’s trading session as a narrow down spread candle which perched delicately on the 9 day moving average and traded in a narrow range once again as the pennant formation continues to build, in much the same way as we saw towards the end of September.  The point of the pennant is centring around the $82 per barrel region and the longer the present price action continues, the more dynamic will be the breakout when it finally occurs.  The 40 day moving average has now crossed firmly above the 200 day moving average giving us a strongly bullish signal and suggesting that the breakout, when it occurs, will come to the upside and, as such, should penetrate the upper level and move beyond $84 per barrel on any initial break.  One clear of this price action then expect to see oil move strongly higher, breaching the $87.14 high of earlier in the year and then on towards a test of resistance in the $97.75 price region before breaking above the $100 per barrel in the next few months.   The longer term weekly and monthly charts both confirm this analysis as we continue to hold above all the moving averages as we now await the catalyst for the breakout which could be next week’s FED meeting.