Nymex crude (CL1) has had a nice move up today with a 2.2% gain. However this merely brings prices to the top of the current trading range and critically resistance at $96.11/$96.26 is still untroubled. Any further headway towards these markers should see spec shorts tempted back, with the current bear trend needing a push through $97.10/30 to suggest we’ve seen a more damaging setback – and in turn shifting the s/t target to $100. Below $100 downside targets remain the the real draw for the bigger accounts.
Indeed, we feel fading rallies in the $95.00-$100.00 zone offers good risk/return dynamics aiming ultimately for the mid $80.00’s. A move back through $92.77/80 is the first objective and should see shorts begin to add to positions again, looking for a test and eventual break of the $89.60/70 June lows. Once this area is cleared a push towards more important mid-term support, which lies at $83.34 (38.2% Fib of the Dec ‘08/May ’11 rally) and $83.85 (the Feb low) would be on the cards.
Indeed, we feel fading rallies in the $95.00-$100.00 zone offers good risk/return dynamics aiming ultimately for the mid $80.00’s. A move back through $92.77/80 is the first objective and should see shorts begin to add to positions again, looking for a test and eventual break of the $89.60/70 June lows. Once this area is cleared a push towards more important mid-term support, which lies at $83.34 (38.2% Fib of the Dec ‘08/May ’11 rally) and $83.85 (the Feb low) would be on the cards.
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