Crude oil buying opportunity

May 6, 2015 11:00 AM

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This is the fifth buy signal I have had since the daily chart changed to up at the end of March. Crude oil has also been trading above the 9-period moving average that I consider that a super trend. Support is at $58.50 and resistance is at $61.40 on the June contract.

The weekly chart had a changed to the upside last week and has consistently been making higher lows since the bottom. So, as long as $56.07 holds this trend should continue. The weekly chart below suggests that crude should continue this trend for at least several more weeks. I have resistance at $60.50, $65.00 and $69.00. Although the trend is still down on the monthly chart my research has a King's Cross indicator counter trend buy signal that should eventually get crude to $80. Only a new contract low would negate this.

Bullish Highlights

•  Buy signals on the daily chart

•  Daily chart has been super trending

•  Weekly chart continues to trend up and trend has changed to up

•  Monthly chart has King's Cross buy signal

•  Global quantitative easing keeping demand up

•  Reduced shall production

•  Conflict in Yemen

About the Author

Larry Baer is a senior broker with Zaner Group. He has been in the futures industry for 30 years and his prior experience includes a membership at the Chicago Board of Trade.  During his 10 years on the trading floor, he traded and managed a futures and options operation, which serviced both retail and institutional clients.  He is also the author of “The Trader's Tool Box.”  He may be reached at lbaer@zaner.com and  312.277.0112.