Friday, February 13, 2009

Can Oil catch a break?

Crude oil prices are looking to sneak over their 50-day MA after weeks of loitering below this level. It may take a little longer for a breal to stick given Bollinger Band width is in neutral territory and the directional index shows no discernable trend (which is good considering there was no denying the direction of oil during the second part of last year).

The problem for oil is getting past the trading range up around $51 resistance. It would seem reasonable to conclude there is a floor for oil at $35; given oil is nevery going to $0 and $10 or $20 is so nineties. Gold bugs love their Gold but Black Gold may be a better bet.

Disclosure: Own some USO (but should have gone with USL...)

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts and stock charts website