Daily Chart
The Light Crude Oil prices were going down during yesterday's session after the data from an industry group showed a bigger than expected jump in crude oil reserves.
Crude oil also fell after the talks in Geneva between the international community and Iran over the latter's nuclear program showed some progress.
Thus, we see in the day chart that oil fell to a low of 100.05 or 0/8 Murrey, it is considered as the last line of support and confirms the fact that the price has again sliped away from this area.
Monthly Chart
However, the drop in crude oil should be temporary as the news on the Libyan Prime Minister Ali Zeidan brief kidnap, initiated by the opposition forces, confirms that the internal political situation in Libya is far from stable.
The current output should reach around 700,000 barrels per day, that is still less than the half of its total capacity. In recent days, however, the oil prices edged down due to the concern about the consequences of the U.S. fiscal policy for the economic growth.
So, as we can see in the monthly chart, we have an important support levels of 100.00 and, in fact, at this time the price already rose more than 100 points, and we believe that the overall trend is still remains bullish.
Weekly Chart
The weekly chart shows us the other side of Light Crude Oil (CL) finding support at the line 4/8 (blue line) considered a strong line of support/resistance. On the other hand, we also note that the price is trading in the second bottom line of its uptrend channel.
Finally, the histogram also shows a decrease in the sales force, for which I believe that in the weeks to come the crude oil will resume its upward path and we believe the 100 and 101 areas can be attractive for buying medium and long term with a minimum of 100 pips watering stop loss for a possible risk management of at least 3 to 1.
Only a close at least one full day sailing below $100.00 would invalidate this scenario and we may change the landscape entirely.
If you have any questions or suggestions, please contact me via email: antonio.inga@analytics.instaforex.com
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