Technicals | Mar 17 2011
– Oil prices returning to previous breakout levels
– Momentum approaching oversold levels
– Technical analysts at Barclays turning more positive
By Chris Shaw
Oil prices are returning to breakout levels of US$94/95 for West Texas Intermediate and US$103.35/$105.60 for Brent Crude. This price action is seeing the technical analysts at Barclays Capital turn more bullish.
As the analysts note, momentum is quickly approaching oversold levels, a complete reversal of the overbought signals being displayed a week ago.
In the view of the technical analysts Brent crude appears to be forming a flag-like pattern. This suggests if the uptrend of the past 10 months is to continue, fresh demand should be located around these levels.
A break above former range lows around US$112.40 would suggest a re-test of US$116.50 according to the analysts, though the preference is for gains above US$118.50 as this would confirm an extension through previous highs of US$119.79.
Medium-term the technical analysts at Barclays remain bullish for a move towards US$122 per barrel for Brent crude.
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
