Chart of the day: Nymex crude oil sputters
The rally since February’s dramatic low, when the ratio between oil and gold got to the most ridiculous extreme ever, was not surprising as it started from ultra-long-term support between US$25 and US$30 per barrel on the Nymex. A little further follow-through to this rally might be possible over the next three months due to the quarterly hammer candle. But rather than the start of a new bull market, readers and investors should see this as part of a lengthy process in finding a new interim base. Rallies above US$45 to US$48 are going to be hard to sustain over the coming quarter and therefore traders should try to profit from swings between these two broad chart areas.
Nicole Elliott is a technical analyst