Crude Oil - Correction Could Compet $90 - $88 Zone

Crude Oil (CMP: $92.7) - is showing bullish outlook for the short-term perspective.

The price has almost reached the support zone. It has moving in contracting manner in the last couple of years. The full price development from May 2010 to till date is a sort of symmetrical triangle in which one more rising leg is unfolds.

In the short term the price is moving within the smaller downward sloping channel setup (Marked dotted blue line), which is a bearish sign for crude. Once the channel is breached then we may see sharp up move and the price would start retracing the last falling leg. Breakout above 95 could confirm the rising leg. The golden retracement levels of 38.2%, 50% and 61.8% are placed at 99.5 – 102 – 104.5 levels respectively.

The standard Bollinger band study is suggests that crude could bottom out soon. The multi-month (Blue Line) also suggests that crude could resume the uptrend after testing 90 – 88 levels. This level is confluence with the trend line support.

200 Week EMA is placed around 91.45. The weekly oscillators are placed in negative zone.

Conclusion: Cluster support level placed at $90 – $88 band. Once it has tested $90 - $88 levels, then crude oil would resume the pullback towards $99.5. Investors can use this dips as a buying opportunities.