Crude oil Daily outlook – 16 November
Last week our analysis suggested we may see crude heading towards 100.00 of the back of the Hikkake pattern that formed at the start of the month. The bulls did indeed continue pushing the market higher with yesterday’s price almost reaching the all important 100.00 level.
Price action is now suggesting we may see a ‘bounce’ of the 100 area with a possible retracement in the coming days.
The 100 area has proven in the past to be a both psychological and technical support/resistance area. Between May and July this year 100 held the market well with May – June seeing a lot of chop and July finally seeing the market rejecting the level and falling to lower ground.
The strength of 100.00 is further confirmed by a 61.8% Fibonacci retracement level sitting just below at 99.58. Taking the highest swing in 2011 to the lowest swing in 2011 we can see the market is now nearing the 61.8% which could prove to be a strong level of resistance
With the strong psychological and technical level at 100 tied in with the 61.8% Fibonacci retracement level we may see the market ‘bounce’ from this area with a push back lower. It’s important to take into consideration the strong bullish momentum we’ve been experiencing since Sept/Oct; however resistance at 100 is looking like it could hold. We will be looking for price action rejection signals at this area before placing any shorts with an initial target of 94.00 and potential for 90.00 depending on market conditions should we see a fall.
