Oil Rallies As OPEC Maintains Its Current Production Levels
The price of oil has rallied substantially after its December 14th Low of $69.55. The fundamental factors supporting oil this week were two fold, firstly OPEC decided to maintain its current production levels in Angola and then crude stocks dropped 4.9m barrels last week, far above the consensus forecast for a decline of 900,000 barrels.
Technical Outlook
arguments for resistance
1. 61.8% retrace @ $78.25
2. horizontal resistance @ $78.1, $78.75, $79.5
3. trendline resistance @ $80
4. relationship between dollar and commodity getting weaker
5. the rise has been based on low volume
6. eur/usd due to fall further in the coming as it target 1.40, although relationship weak the impact is still there regardless of how weak it is
7. we have had a fake out of the red trend lines = wedge formation ..........a fake out is usually followed by a true break out.
8. Oil moving with equity markets , equity markets looking very frothy and nearing there highs .....hence equity markets down , oil will go with it.
arguments for
1. up trend is till intact with HH's and HL's and no signs of reversal yet.
2. upward sloping trend line is intact
3.0 we are still trading with the wedge of red trend lines
