Wheels of the Crude Bull Train Look Nicely Oiled

The Commodity Trader’s view - Trends take time to reverse and Crude Oil is no exception. Now, after a Feb low point, a base has been established and the bull train has left the station. There will, of course, be stops along the way and we look at possible nearer term ones here.

• WEEKLY CHART – JUL-09: On the continuation chart (not shown) it was a break above 50.00 (area of the major Jan-07 low) that gave us an initial bull signal. On the Weekly chart of the new front month this low lies higher, but it has also been exceeded. Two possible station stops here are the Fibo retracements of 23.6% 67.00, and 38.2% 82.40.
• DAILY CHART – JUL-09: We can say that a medium term base completed after the break above falling resistance. The shorter term structure suggests no bull fatigue yet, but we note some (presumed temporary) overhead hurdles:  dual resistance from a channel top projection and equality target (42.19-57.50 upleg extended from 49.07 low, around 64.50 just now  the 23.6% 67.00 level  a Fibo projection at 71.35 These advocate a strategy to buy on dips, such as towards the return line near 56.00, stops at least below rising support at 52.50, if not just below 49.07 21-Apr low. Ideally support for dips will be found above that rising support line, but ultimately we want to see the 49.07 low stay intact – a close below here would be of grave concern to the bulls.

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