Crude Oil Attempting To Break Lower

Somewhat of a surprise that with all the Geopolitical unrest, there is plenty....that Crude Oil futures are heading lower.

Between Gaza/ Israel, North Africa, Ukraine, one would think there is enough risk that some premium would build into crude oil future pricing but that is not the case. When I started in the commodity business in 1998, a veteran once told me that if the "news/rumors" are bullish but market reaction is bearish - watch out as they may be more pressure on the market.

Since then I have learned that it would almost be impossible to have a good grasp about the fundamentals that affect about 25 commodity markets I follow on a daily basis so my focus shifted into technical analysis.

Below you will see the weekly chart for crude oil futures. Using Fibonacci extension I try to predict support and resistance levels along with potential targets for the move. As I see the market right now, we are about to test MAJOR support level at 97.20. This level held back mid March of this year and last week. A break below this level and a daily close below 97.20 would suggest that a test of 91.22 is near. On the flip side if this level holds and the market has enough bounce in it to go above 99.71 we may see a reversal to the upside. As I mentioned earlier, there are plenty of Geopolitical risks out there and i would personally try to measure my risk by either using options as protection, perhaps consider spreads and regardless use a stop order if and once I entered a position. For more information about Crude Oil Futures Trading visit our website.

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