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Crude Oil Rejected at 61.8% Fibonacci Retracement

Crude Oil Rejected at 61.8% Fibonacci Retracement

Christopher Vecchio, CFA, Senior Strategist

Daily Bars

eliottWaves_oil_body_Picture_5.png, Crude Oil Rejected at 61.8% Fibonacci Retracement

Prepared by Christopher Vecchio, Currency Analyst

Last week I wrote “Crude Oil’s advance of nearly 15% off of the late-June lows has reached a point of technical exhaustion, with the daily RSI reaching overbought levels as price entered former zones of consolidation/swing lows, from back in the first quarter and early-November 2011. Accordingly, a pullback is expected to materialize.” The pullback has materialized over the past few days as the overbought daily RSI reading alongside a test of the 61.8% Fibonacci retracement on the March 1 high and the June 28 low has led to a pullback. A weekly close above this level – 97.80/85 – suggests that the recent rally is not just a retracement but rather a trend reversal. Near-term support comes in at 92.50, 89.50, and 86.80. Resistance comes in at 97.80/85, 98.25 (August high), 100.90/101.00 (April swing lows), and 103.25/30.

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