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Date:
Wednesday, October 21, 2009
Trading Symbol: OTCBB:AAPH
Crude Oil Is Poised to Top $100 a Barrel: Technical Analysis
Crude oil is poised to top $100 a barrel after breaking out of a five-month range, according to technical analysis by Auerbach Grayson, a brokerage in New York.
Futures traded between $56 and $75 a barrel from May 8 to Oct. 13. They climbed above $80 yesterday before closing lower for the first time in nine days. A price decline represents a buying opportunity, according to Richard Ross, a technical analyst at Auerbach Grayson.
“We broke out strongly from a five-month period of consolidation,” Ross said in a telephone interview. “The longer the period that we break out of, the stronger the following move will be.”
Oil will next hit resistance at $103.76 a barrel, which corresponds to a 61.8 percent retracement of crude’s collapse from its record of $147.27 last July to $32.40 in December. The significance of this percentage move comes from the ratios between numbers in the Fibonacci sequence, used by traders to predict points of resistance and support.
“The headline number is $100, but the real target is $103,” Ross said. “That would be a gain of about 25 percent from where prices are now. It’s nothing to sneeze at, but not unusual either. That’s less than the move we’ve seen from June’s lows.”
Futures have climbed 36 percent since dropping as low as $58.32 a barrel in June.
Source:
Bloomberg.com