Crude Oil Chart 4 Dec 2009
Technically Friday was another weak day for oil prices, as the daily oil chart ended the trading session with a doji cross candle, with a deep shadow to the upper body, which when added to the recent downwards slide, suggest a market with an increasingly bearish flavour. The most worrying aspect of the recent price action ( for oil bulls at any rate) is the series of lower highs which are now being created as each week passes, with each daily candle finding a lower high than the previous day, suggesting once again that the oil buyers are becoming more price sensitive and increasingly resistant to higher prices, never a good signal, with the deep wick of Friday indicating the selling pressure which overcame the bulls attempt to rise. With all three moving averages now beginning to turn lower and adding their own extra pressure to the move, the key for the longer term will be the reaction of the deep support region now potentially awaiting below. Should this provide the necessary barrier, and a platform, then we should see a rebound in oil prices as as result. However, should this fail to hold, then a much deeper move becomes increasingly likely in the medium term. To the upside, only a break and hold above the 82.50 per barrel level will indicate that the bullish momentum of the last few months has returned, and as we approach the year end expect some unusual and volatile price action as the markets begin to trade on thin volumes. Overall WTI ended the oil trading session at 75.47 having opened at 76.10 and traded between a high of 77.90 and low of 74.85. Brent closed its session at 77.52 having opened at 77.59 and traded between a high of 79.80 and low of 76.94. Oil futures vols: 400k+ & 173k+ respectively.
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Support & Resistance for WTI:
S1: 74.24 R1: 77.29
S2: 73.02 R2: 79.12
S3: 71.19 R3: 80.34
Support & Resistance for Brent :
S1: 76.37 R1: 79.23
S2: 75.22 R2: 80.94
S3: 73.51 R3: 82.09
