Oil is in the news and it shows on the chart (CL 60mn). Stair-steppping the upper Bollinger bands as we attempt to make new highs. At this point, I like to look at Fibonnacci projections should we eclipse the April high of 75.35. Using as a high 75.35 and a low the recent V bottom pullback to 70.75, we get a better idea where this is headed should a stampede of short-covering/stop-run push occur above 75.35. My guess is right up to 78.20, 61.8%, but oil bulls would be very happy with 50% at 77.65. Key support is now 73.60 and 73.05. Frankly, I think the bad news is already priced in, but many have lost that bet recently. Be sensible and wait for a breakdown if you must go short. Cowboys can attack bounces after any failure below 75.35, but use tight stops. Should we break above 75.35, don't argue, fasten your seatbelts and enjoy the ride. Your disbelief is shared by thousands of rookie traders who feed the beast by shorting it.
This entry was posted
on Tuesday, May 02, 2006 at 5:17 PM.
