Crude oil conundrum

Crude oil prices have given their first weekly positive close in last five weeks. There is little evidence that the downtrend has ended but a positive bias is now emerging in the markets. We open up the next week with a new month. So there could be heightened activity in the crude oil market on Monday.

Over the years I have seen enough sharp swings in commodity markets when a new calendar month begins. There are two important developments in the long term crude oil price graph. The long term trend line has not been breached untill now and prices are oversold to the highest degree compared to last seven years. Have a look -



Crude oil prices are expected to move up to $72 and then $76. Current rebound may last till $80 and we may see some selling pressure at those levels. $63 should hold as a strong support if this upmove has to last.