Crude Oil Chart - 18th December 2009
The long legged doji of last Monday was the signal that many technical oil traders had been waiting for following the sharp sell off in crude oil prices of the past few weeks, and was duly confirmed as a turning point throughout the remainder of the oil trading week, with oil prices closing firmly higher and recovering of their lost ground. Indeed Friday’s candle added further momentum to the short term bullish sentiment opening in the morning with a gapped up move which also breached the potential resistance in the $73 per barrel level, suggesting that the renewed optimism in oil prices may continue in the medium term. However, whilst Friday’s candle closed in positive territory technically it ended with a deep upper shadow which seemed to find some resistance from the 40 day moving average so we need to be cautious in our oil trading over the last days of 2009. With oil prices now sandwiched between the 14 and 40 day moving averages and with sustained potential resistance immediately above this could prove to be tricky area for oil prices in the coming weeks. To the upside only a break and hold above the $82.50 per barrel price point would indicate a sustained move higher whilst the deep resistance immediately below in the $65-$72 price zone may prove an impenetrable barrier. The WTI oil contract opened Friday at 72.60 per barrel, rose to a high of $74.69 per barrel, with a low of $72.55 per barrel before finally closing the day and the week at $73.05 per barrel.
Looking further ahead on the monthly chart we now seem to have cleared the potential resistance in the $72.50 per barrel price point created back in mid 2006 and with the low of the month finding good support from the 9 month moving average this is now indicative of a positive higher for oil prices in the longer term with $90 per barrel being the start of the next key resistance area.
What is the best oil trading platform? In my view it is Metatrader 4. so why not download your free demo copy of the metatrader 4 software by clicking on the following link, download metatrader free, and get started today.
WTI Oil Contracts
Support: 72.17 Resistance: 74.31
Support: 71.29 Resistance: 75.57
Support: 70.03 Resistance: 76.45
Leave a Reply