The Commodity Specialist view –
S/term strength in Brent Crude Oil has put former bears firmly on the sidelines, with new 2009 highs recently seen. Any pullbacks are now likely to be temporary ahead of further upside action.
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WEEKLY CHART – CONTINUATION:
Earlier this year the recovery paused ahead of the 38.2% recovery level, but setbacks proved relatively modest.
It has been eroded now, and the recent price swings may be viewed as what textbooks refer to as a ‘running correction’ – a sign of strength.
The risk is definitely to the upside now, with next focus on the 50% level on this chart. -
DAILY CHART – DEC-09:
The slip back from 77.71 Aug high found effective support from our channel base projection (there was dual Fibo support here too).
Subsequent strength proved more than a short-lived affair and break above 77.71 implies strength.
S/term note resistance from the rising resistance line and slightly higher channel top projection around 81.00 – a pullback would not surprise from here, but the assumption is that it will be temporary and not too deep.
The 72.92 17-Sep high offers support, and also note the lower 61.8% pullback level around 70.75 currently – buyers on dips will ideally favour towards this latter level, though no guarantee this will be seen. - In the s/term, a break through the channel top resistance would first target towards the 85.67 area, 1.618 swing projection off prior 77.71-64.83 pullback.
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