Quick Technical Look at Oil

Wednesday, August 19, 2009

A cocktail napkin look at the crude oil market shows the commodity putting in a solid base in early 2009 between $35 and $50. A break through resistance in March setup a nice consolidiation and then a strong move higher for to $73 a barrel. The drop in late June came on the back of Congressional rumblings of reigning in speculative activity in the market. Yet, this pull-in was quickly recovered as crude retested highs again in late July.

The market continues to look strong with a series of short-term higher lows throughout the month of July and into August. The defined resistance level at $73 is a classic pivot point traders will be watching. We are still in the midst of the summer driving season and still see a weak dollar. Both these factors may trigger another push higher before the top of this move is found.


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