FX.co ★ CRUDE OIL Bearish Outlook May 03, 2011 (Daily Strategy)

CRUDE OIL

The price of oil continues to broadcast signals pointing to a trend reversal after it reached its exact previous record high of around 114,75 dollars per barrel of oil.The weekly resistance situated around 115.07(R1) along with the accompanying negative deviation from the MACD indicator, increases the possibility for a new wave of reductions that is expected to lead the price of the "Black Gold" back towards support levels of around 108 dollars at the very least.

The small trend line that accompanied last week's increases can be used as a good trigger on which to base a short position in the event that the price breaks downwards. Closure beneath the level of 111.5 will be the signal for an entry with a price target situated close to the support level of 108.00 dollars. The STOP order can be placed just a little above the previous high at 115.70 dollars.