Daily Forecast - 07 January 2016
WTI Crude February contract
WTI Crude lower as expected & breaking February contract lows was not a surprise. Important trend line support at 3405/00 was tested & although we over ran it was only as far as 3377. For the first time in as long as I can remember I am almost tempted to start thinking about longs in oil. Why? 1. We held December lows. 2. We held important 9 month trend line support. 3. We are fairly close to 2009 lows at 3270/3240. We are watching carefully for a positive signal now. Until then, first resistance at 3450/55 today then stronger resistance at 3490/99. Shorts need stops above 3520. A break higher targets 3540 then resistance at 3560/70. A good chance of a high for the day but shorts need stops above 3595.
The 3400/3380 area is very important support. Longs need wide stops below 3355. Further losses could target the important 2009 lows at 3270/3240. Bulls must go all out to defend this support or we could see prices sub 3000 before long.
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