crude oil chart for nymex futures 11th January 2010
The recent surge higher in the price of crude oil has come to a temporary halt in the past few days with last Friday’s doji candle pointing to a market lacking direction and somewhat surprising considering the resumption of dollar weakness. This temporary pause point has been confirmed in today’s oil trading session with daily oil prices generally moving lower and creating an outside day candle as a result. Given the combination of a doji and subsequent “outside day” candle, we may well see a short term reversal lower possibly even to re-test the strong support in the $80.50 per barrel price point but this floor should hold firm and provide the necessary platform for the resumption of the bullish trend in due course. With a substantial clear water above all three moving averages there is little cause for concern in the medium term but in the short we may see a temporary dip in daily oil prices which should then recover to attack the $85 per barrel price level which is now once again on the horizon.
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