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Daily Oil Prices 7 Oct 2010

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WTI Oil Chart 7 Oct 2010

The WTI daily oil price blasted through the minor resistance at the $82.97 price point ending the oil trading session as a relatively wide spread up candle but with wicks to the top and bottom signifying a somewhat volatile trading session which saw oil prices react to the build in the crude oil inventories.  Despite this, however, the strong bullish trend of the past few days remains firmly in place and having broken above this key resistance level the technical picture is now set for a strong move higher to develop over the next few weeks. The breakout was triggered last week from the pennant formation created throughout August and much of September, and since then we have seen a surge higher with strong support from the short term moving averages, in particular the 9 and 14 day.  Both of these have now crossed the 200 day, once again giving us a strong bullish signal, and with the 40 day now beginning to turn higher this is adding further to the positive tone.  This positive momentum has continued in both overnight and early trading, with daily oil prices trading higher once at $83.71 per barrel at time of writing.  Our next target for crude oil is now the high of April 2010 which saw the commodity touch $87.13 which now represents a further area of potential resistance.  Should this fail to hold then the WTI oil contract will have a relatively clear run towards the $89.60 last achieved in late 2008.