Favoritearea; Natural Gas and Crude Oil Daily Outlook Feb 2011

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The natural gas remains neutral for the moment as sideway consolidations from 3.825 might be in progress. Nevertheless, in case of another rise, upside should be limited 4.252 resistance and bring another fall. We’d expect current decline from 4.879 to resume sooner or later to retest 3.255 low.

In the bigger picture, current development suggests that medium term decline from 6.108 is still in progress. Such decline would now extend lower to correct the rebound from 2009 low of 2.409. Though, we’d expect strong support above 2.409 low and bring another rise.

Note that long term down trend should have bottomed out at 2.409 and we’d expect another rise to push natural gas through 6.108 resistance towards 38.2% retracement of 13.694 to 2.409 at 6.72 in medium term.

In crude oil chart, We’d continue to expect further rally in crude oil as long as 90.05 support holds. Crude oil is still in medium term up trend and should be targeting 100 psychological level next. On the downside, below 90.05 support will suggest short term topping but outlook will remain bullish as long as 83.85 support holds.

In the bigger picture, current development indicates that whole medium term rise from 33.2 is still in progress. Such rally is treated as the second wave of the consolidation pattern that started at 147.27 (2008 high).

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Further rise could still be seen to 61.8% retracement at 103.70 and possibly above. On the downside, break of 83.85 support is needed to be the first sign of medium term reversal and break of 64.23 is needed to confirm. Otherwise, outlook will remain bullish.

source: http://community.nasdaq.com