Crude Oil Reverses to Downside
Commodities / Crude Oil Jan 28, 2011 - 01:56 AM GMTBy: Mike_Paulenoff
Let's notice that after rallying strongly yesterday and recovering to test resistance around $88.00, crude oil prices have reversed to the downside again and have pressed to a new reaction low at $85.63.
Yesterday's upside failure confirms the importance of the $87.80-$88.00 resistance plateau, and today's resumption of weakness provides further technical evidence that oil prices -- and the U.S. Oil Trust ETF (USO) -- are in the grasp of a correction off of the Dec-Jan top formation. The correction projects to an $82.00-$80.00 near-term target in crude, with downside "overshoot" into the area of the January 2009 trendline, now at $80.66.
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By Mike Paulenoff
Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.
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