Technicals | Aug 05 2010
By Rudi Filapek-Vandyck
Crude oil and gold remain at the forefront of market analysis at the technicals desk of Barclays Capital in London. Crude oil futures stalled last night and that was exactly as predicted by the team on Wednesday.
The technical market analysts note the US$82.79/83.56/bbl area resistance for WTI futures remains in place while market momentum readings are now in overbought territory. Investors looking to trade short term momentum are probably better off by positioning for a pullback, suggest the analysts.
A break of technical support at US$80.82/97 (200-day average, April/May decline and June 21 high) would confirm this view and shift the market's focus back towards the July highs at the US$79.60/78.55 area, the analysts add.
As far as gold is concerned they have better news. As somewhat expected on Wednesday, gold has now broken above its 21-day moving average and this has triggered a shift in the team's official stand on the precious metal's short term outlook; it's now Neutral from Negative previously.
The analysts observe a turnaround in market momentum is behind the recent price surge and as such they predict the coming sessions are likely to see further gains.
Also, point out the analysts, gold's best season of the year usually starts in the final week of August and that is only weeks away.
Gold bulls need a sustained break of the 50-day average -now at US$1212/oz- to suggest a return to the US$1265 bull market highs, say the analysts.