February crude oil posted an inside day with a lower close on Tuesday ending a two day short covering bounce. Today’s mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are oversold but are turning bullish hinting that a short term low might be in or is near. Closes above the reaction high crossing at 52.95 are needed to confirm that a short term low has been posted. If February extends this year’s decline, support crossing at 35.00 is the next downside target. First resistance is Monday’s high crossing at 42.20. Second resistance is the 20 day moving average crossing at 43.79. First support is last Wednesday’s low crossing at 35.13. Second support is psychological support crossing at 35.00.
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