The September 14 crude oil contract has been locking in a
sideways range over the past 6 sessions holding just above 200 day moving
average support.
The September contract did briefly breakout out below 200
day moving average support last Thursday reaching a 96.55 low before reversing
back higher. The contract on Friday settled the week nearly where it
began on Monday closing at 97.65, down .23 for the week.
The market may be bottoming following the most recent sell
off. A breakout above the 10 day moving average at 98.25 today followed
by last week’s 98.67 high would turn the near term trend back higher with the
next longer term resistance being the 40 day moving average at 102.00.
A downside breakout below the 200 day moving average at
97.10 and last week’s 96.55 low would turn the longer term trend back down with
91.00-92.00 weekly chart support then becoming the next downside
objective.
The eventual breakout in whichever direction will likely be
known over the next few days of trade.
Hedge funds have been liquidating positions but remain
fairly long at 347,204 contracts according to Friday’s Commitment of Trader’s
report. A close under the 200 day moving average could spur further
liquidation.
Technical Indicators: Moving Average Alignment –
Neutral-Bearish
Long Term Trend Following Index – BearishShort Term Trend Following Index - Bearish
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