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Jim Hyerczyk

Jim Hyerczyk

Fundamental and technical analyst with 30 years experience.

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Today’s Trading Could Set Bullish Tone For Oil Next Week

March Crude Oil Analysis

This week starts with March Crude Oil futures in basically the same position as last week. The main trend is down according to the weekly swing chart and the market is rapidly approaching the psychological support level at $25.00.

It is also in a position to test a pair of downtrending Gann angles. Trader reaction to these angles will set the tone of the market. On the upside, the first angle, moving down $0.50 per week from the $41.25 bottom drops in at $30.25. Overcoming this angle will put the market in a strong position and could fuel the start of a short-covering rally.

(Click to enlarge)

A sustained move over $30.25 could create the momentum the market needs to test another downtrending angle at $35.75.

On the downside, the key angle to watch is the steep downtrending angle from the $50.70 top. This angle also moving down $0.50 per week and comes in at $26.70. Holding on the bullish side of this angle will indicate that buyers are starting to come in to support the market. However, crossing to the weak side of the angle will put the market in an extremely bearish position.

If crude oil continues down the path of the downtrending angle then we will get our test of the $25.00 level the week-ending February 5. The angle drops down to $24.70 that week. It’s too early to tell if the market will be coming up to test the angle or coming down.

As far as the week-ending January 22nd is concerned, the market is currently in “the window of time” for a closing price reversal bottom on the weekly chart. This is a bullish chart pattern that often leads to the start of a 2 to 3 week rally. The key number to watch on the close on Friday, January 21 is $30.39. A close over this level could set a bullish tone for next week.

March Natural Gas Analysis

March Natural Gas futures are in a position to end the week in a precarious position. It is currently testing a key retracement zone. Trader reaction to this zone will set the near-term direction of the market.

The main trend is down on the weekly chart, but the recent rally shifted the momentum to the upside. The main range is $3.062 to $1.91. Its retracement zone is $2.486 to $2.622. This zone stopped the rally when the market reached a high at $2.493.

(Click to enlarge)

The short-term range is $1.910 to $2.493. Its retracement zone at $2.202 to $2.133 is currently being tested. This is a…




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