Deeper technical look at the Crude Oil price 21-11-2012

By studying the weekly chart for crude oil, we find that the long term trading continues organized within major upside channel shown clearly on the image above

This bullish channel carries the price from the recorded low near 35.00 per barrel, and we can notice that the recent trading is near this channel’s support.

The mentioned channel organizes the upside correctional wave for the entire fall that started at the historical high recorded at 147.85 reaching to the above mentioned low, thus, being unable to breach above the critical resistance levels represented by 104.65 followed by 121.25 means that the longer term negative effect remains valid.

The price has now some positive technical factors that might make the upside resumption preferred on the medium and long term, these factors start with Stochastic positivity shown clearly on the weekly timeframe, besides the success breach above a falling-wedge-resistance which limited the trading since mid august 2012, this wedge can be seen in the following image:

So, the price now is in the process of retesting the previously breached resistance for the mentioned wedge, but it found strong resistance yesterday at the 50-days EMA, which let the trading hesitant between a contradicted technical factors.

To summarize the above article, we can say that oil price is on the crossroads on the short and medium term, and the sensitive levels represented by:

1- 86.40 support, while a break below this level will put the price again below the wedge resistance and opens the way to head towards the main channel’s support line shown in the weekly chart, this support level located now at 82.20

2- 89.15 resistance, and a breach above this level followed by daily close will provide a positive motive that will push the price to visit the next critical resistance at 91.50, while a breach of this level will be the strongest factor to assist the price to confirm more upside actions on the medium term and long term basis.