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by Austin Passamonte
Here's a market outlook for the crude oil futures index.
Position: N/A
Austin Passamonte
Austin is a private trader who trades emini stock index futures intraday. He currently trades various futures markets from home in addition to managing a trader's educational forum
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TECHNICAL ANALYSIS
Drilling Range For Crude Oil Futures
05/11/10 12:03:29 PMby Austin Passamonte
Here's a market outlook for the crude oil futures index.
Position: N/A
| Crude oil has the unique distinction of being a consumable commodity product and a quasicurrency market in rather equal balance. The effects on crude oil pricing are part supply/demand and part US dollar value offsets. |
|
| FIGURE 1: CRUDE OIL FUTURES, DAILY |
| Graphic provided by: TradeStation. |
| |
| That being said, crude oil futures have generally rolled through a sideways range from roughly $74 to $86 per barrel since October 2009 with brief blips outside either extreme (Figure 1). The recent power dive that sent crude prices $13 bbl lower inside of five trading sessions spanned the entire range. We can see where the 74+ mark served as low zone supports in December 2009 and February 2010 before popping to subsequent highs each time. We'll see how this trip resolves itself, accordingly or otherwise. |
|
| FIGURE 2: CRUDE OIL FUTURES, WEEKLY |
| Graphic provided by: TradeStation. |
| |
| Dialing out to the weekly chart view (Figure 2), the same sideways channel shows clear persistence dating back more than a year. Meanwhile, vertical trendlines of support can be seen from bottom lows to higher-swing lows along the way. Both levels were broken on a weekly close basis and now appear to be overhead resistance until proven otherwise. |
|
| FIGURE 3: CRUDE OIL FUTURES, DAILY |
| Graphic provided by: TradeStation. |
| |
| Back inside the daily chart for CL (Figure 3), we see a bearish head & shoulders formation with crown to neckline roughly $7 in width from 89 to 82 levels. That projects $7 down from crown to low objective or about the $75 mark extended. Bottom of the channel dating back for a year is the bottom of the H&S pattern projection. There is a sticky magnet near the $75 zone. If CL continues to trend lower from here, look for that clustered magnet zone of prior support to then become equally strong resistance. |
Austin is a private trader who trades emini stock index futures intraday. He currently trades various futures markets from home in addition to managing a trader's educational forum
| Title: | Individual Trader |
| Company: | CoiledMarkets.com |
| Address: | PO Box 633 |
| Naples, NY 14512 | |
| Website: | coiledmarkets.com/blog |
| E-mail address: | austinp44@yahoo.com |
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Date: 05/11/10Rank: 5Comment:
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