Market Technical View is a blog that mostly concerns the technical analysis of different financial instruments like indices, commodities, stocks, ETFs and currencies.

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Tuesday, May 22, 2012

Crude Oil (WTI) - reversal pattern. 2012.05.22

The daily chart of Crude Oil (WTI) shows the piercing pattern formed in the last couple of days in the support zone between the $90.00 and $92.20 levels.

Technically speaking, this is a reversal pattern that marks the beginning of a rally. The closest target is in the $98.15 area, which would provide a 5.9% increase in crude oil price.

Even though the Organization for Economic Cooperation and Development (OECD) trimmed economic growth forecast in the euro area (according to Bloomberg), the oil market could easily reverse on the agreement between Iran and International Atomic Energy Agency on nuclear inspections.

Moreover, the technical outlook suggests higher prices in the next month as the $90.00-$92.20 area represents a cluster of supports.  

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