Oil Market Update
June 27, 2007
The overall picture for oil remains favorable with the price advancing away from a large Head-and-Shoulders bottom formation. On the 1-year chart for Light Crude we can see how this base pattern developed since last September. Although the break above a clear line of resistance at about $67 this month was a bullish development, the lack of vigor and follow through on this move and the dramatic ramping of the Commercials’ short position as last reported increases the likelihood that the price may slump back into pattern to “do more work” before significantly higher prices can be attained. Thus over the short-term we may see the price dip back below $67 towards the area of its 50-day moving average.
Oil stocks have had a great run, but are now at their maximum intermediate target and very overbought. We have been selling them into this rise in recent weeks and it is now thought prudent for traders still holding to take profits in anticipation of a reaction back across the long-term trend channel. While a throw over move above the upper channel line that might lead to a vertical spike cannot be ruled out, it is viewed as considerably less likely than a reaction setting in.
June 27, 2007
Clive Maund is an English technical analyst, holding a diploma from the Society of Technical Analysts, Cambridge and lives in Copiapo, Chile.
Visit his subscription website at clivemaund.com .[You can subscribe here].
No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.
Copyright © 2003-2007 CliveMaund. All Rights Reserved.
|Home :: Archives :: Contact||
November 30th, 2020
© 2020 321energy.com