Despite yesterday’s wide spread down on the WTI daily crude oil chart which indicated a relatively weak oil market, the short term outlook still remains bullish for crude oil as evidenced by three factors: first yesterday’s low found strong support from the 9 day moving average, second the 9 day moving average itself has crossed above the 14 day moving average giving us a bullish signal and finally we have last week’s deep hammer candle which has now been validated with the break above the short term moving averages. However, from a technical perspective we still remain firmly below the 200 day moving average and until we see a breach of this key indicator in the $77 per barrel area then any recovery for the WTI crude oil contract could be short lived. Any break and hold above here will signal a confirmation of a resumption of the bullish trend. The weekly chart is less bullish longer term while the monthly chart looks more positive with the last month’s low having found support from the 14 month average and bouncing off the support at $70 per barrel.
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