Crude Oil Support level at US$75

The price of crude oil broke above the resistance level of the immediate down trend channel on the 9th October. End September, the price of crude oil was at US$66 and was expected to rebound, as I have commented last month. Oil went above the resistance level at $72 and rallied to $81 before settling at $77 on 30th October. The short term 30-day moving average which was declining last month has started to increase. The price is now above the short to long term 30 to 90 day moving averages.

The price of oil is currently in a minor correction downwards with a support level at$75. Momentum indicators is still above the middle level and this means that the bulls are still in control. It is still early to forecast which direction the price is expected to head in the short term but the oil is expected to stay sideways if the price trades in an immediate support and resistance range between $75 and $82. If the resistance is broken, price is likely going to rally to the next resistance level at $91. If it breaks below $75, most likely it is going back $65 to $70 range (The longer term average)


Daily Crude Oil (on NYMEX) chart as at 30 October 2009 using NextVIEW Advisor

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.