Focus on Oil
Fear gripped the Crude Oil market last week, with Brent Crude Futures traded above $100 for the first time in over two years on Monday. Traders will be keeping a keen eye on the oil prices over the next few days and assess whether the current move is over-exaggerated or if it really does reflect underlying fundamentals.
From a technical perspective –
Bulls have aggressively regained control Buyers will aim to consolidate the aggressive move and hold onto their gains. They should look to build a stable base above $90.50 or at the very least hold onto strong support at $88.45.
Ultimately, bulls will aim to break above $93.46 –
Sellers will hope the recent rally will retrace as quickly as it advanced.
A break below $88.45 would be a significant victory for the bears and could be a genuine trigger for further losses back down to the mid $80 trading range.
|Bears have once again lost their foothold in the market. Many sellers may feel that their positions were unlucky to be caught out by such an aggressive reaction to fundamental news. They may feel that the move is an overreaction and that the market is in an obvious place to fade the recent rally.|
|Bulls have succeeded in reversing the previous week’s sell off. With momentum back on their side and the current dire fundamental situation in the Middle East, buyers will be looking for the market to follow-through in the next several trading days.|