Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Crude Oil Price At Crossroads

Commodities / Crude Oil May 19, 2014 - 04:28 PM GMT

By: Nadia_Simmons

Commodities

On Friday,  crude oil gained 0.61% as strong U.S. economic data and ongoing worries over the crisis in Ukraine weighted on the price. Thanks to these circumstances, light crude came back above $102, but does this growth change the short-term outlook for the commodity?

On Friday, better-than-expected numbers from the housing sector gave crude oil a support. The Census Bureau reported that U.S. building permits rose 8% to 1.080 million units last month (while analysts had expected an increase to 1.010 million units in April) and the Commerce Department showed that U.S. housing starts rose 13.2% last month to 1.072 million units, beating expectations of 980,000 gain (it was the largest increase in five months).


The commodity was also supported by heightened tensions between Russia and Ukraine as Russia informed the EU that it would stop natural-gas deliveries to Ukraine on June 1 unless it receives payments for past-due amounts. Ukraine said it is preparing to pay $4 billion to Gazprom but hopes to negotiate lower prices. These events fueled worries about the potential supply interruptions from the region and pushed the price of light crude to over $102 per barrel once again.

Will we see the commodity higher in the coming days? Let’s check the technical picture of crude oil (charts courtesy of http://stockcharts.com).

Although crude oil gained 2.11% in the previous week, the medium-term situation hasn’t changed much as the commodity still remains below both medium-term resistance lines. Therefore, what we wrote in our last Oil Trading Alert is up-to-date:

(…) we remain convinced that as long as this strong resisrance lines remain in play further deterioration is still likely. (…) from this perspective, the recent  upward move seems to be nothing more than a veryfication of the breakdown. If this is the case, the bearish scenario (…) will be in play:

(…) if the commodity extends losses (…), we will likely see further deterioration and a drop even to around $95, where the medium-term support line (based on the June 2012 and January 2014 lows) is.

What can we infer from the short-term chart?

Looking at the daily chart, we see that although crude oil moved higher once again, the very-short term situation hasn’t changed much. Despite Friday’s improvement, the commodity still remains below the medium-term declining resistance line (the upper line of the triangle). In our opinion, even if cude oil climbs above this line, the combination of the black rising line (the lower border of the tringle), the lower line of the rising trend channel  (currently around $103) and the 61.8% Fibonacci retracement will be strong enough to stop further improvement and trigger a downswing – similarly to what we noticed on Wednesday. Please note that Friday’s upswing materialized on very small volume (compared to the previous days), which questions the strength of oil bulls and reinforces the bearish scenario.

Summing up, taking all the above into account, we remain bearish and think that lower values of crude oil are still ahead us. As we have pointed out before, it seems quite likely that even if crude oil climbs higher, the above-mentioned resistance zone will be strong enough to stop further improvement and trigger a pullback in the near future. If this is the case, the nearest support will be the previously-broken 50-day moving average (currently around $100.90).

Very short-term outlook: bearish
Short-term outlook: bearish
MT outlook: mixed
LT outlook: mixed

Trading position (short-term): Short. Stop-loss order: $104.

Thank you.

Nadia Simmons

Sunshine Profits‘ Contributing Author

Oil Investment Updates
Oil Trading Alerts

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Nadia Simmons and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Nadia Simmons and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Nadia Simmons is not a Registered Securities Advisor. By reading Nadia Simmons’ reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Nadia Simmons, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules