Thursday, October 4, 2012

Crude Oil Outlook - More Downside Consolidation Towards US$80-85 Before Technical Rebound

Crude oil outlook: More downside consolidation towards US$80-85 before technical rebound
After our “Downside bias” call on crude oil prices on 18 Sep, oil prices had tumbled from US$96.6 to US$88 yesterday. The fall was in line with slowing global demand amid weakening economic data and an EIA report that U.S. domestic oil output had hit the highest level in nearly 16 years last week.

 After the 4% overnight plunge, daily and weekly technicals are deteriorating, signaling further downside consolidation moving forward.

We expect more pullback towards 84.9 (76.8% FR from top 114.8 and low of 75.7) and 81.9 (200-w SMA) in the short term. More solid supports are 79.6 (weekly lower Bollinger band) and 77.3.

Immediate resistances are 90.0, 92.8 (14-d SAM) and 94.6 (30-d SAM). A more formidable resistance zones are 96.2 (200-d SMA) and 99 (daily upper Bollinger band).  

Daily WTIC - Downtrend Amid Bearish Technicals. 04-10-2012


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