Thursday  5 August 2010

 Current activity in Crude Oil caught our attention for  potential upside continuation that began on Monday,
the 2nd.  While looking for trade set ups, the intra day was showing a probe of the lower end of the
developing trading range after price had been holding for the past three trading days.  This can be a
resting spell, or it can turn price around and head back to the breakout.  The intra day developing pattern,
not shown, is providing a reasonably low risk entry that will give an edge, if the analysis turns out to be
correct.

 Breakouts from a trading range are always a signal from the market showing strength, in this instance,
and buying strength is important when anticipating upside continuation.  From the May low, Crude has
made higher swing lows, just prior to what we are saying is a breakout.

 Any potential breakout has added strength when confirmed by the next higher time frame, the weekly in
this case.  It is apparent from the week-ending 17 May low that it closed at the upper range, showing
that buyers had wrested from gained the upper hand after sellers had been in control.

 Observe most of the weekly ranges, and you will see that the closes were upper end, confirming that
buyers were winning the weekly battle over the efforts of sellers.  We do not know where this can go.
All that can be done is to take a position when it appears opportune and let the developing market
activity tell the story as it unfolds.  The last failed high was in the 87 area, and that would be the first
important test, IF price confirms the breakout.

 We took the daily and weekly chart patterns and used the intra day as a timing tool to gain an edge
for upside continuation, or minimize risk exposure, if proven wrong.