CLM12 - Update for May 11th, 2012

Price analysis for the week of May 11th, 2012:

(Added Monday May 14th)

(Added Tuesday May 15th)

(Added Wed. May 16th)

(Added Thurs. May 17th)

Market Overview: Market fundamentals seem to be prevailing of late. Historically high inventories coupled with poor economic data from all three global economic zones have seriously called into question $100+ per barrel prices. Having said that, the movement away from nuclear (and back to fossil fuels) by Japan and continued middle east tensions have kept a bid in the market. The previously strong weekly bull flag pattern has been broken suggesting prices are heading generally lower over the coming days/weeks rather than higher. Next significant weekly support zone seems to indicate a move back into the high 80s/low 90's area. Having said that, the current daily bearish price pattern (short from just above 101) has hit and exceeded its downside target has still has an associated stop above 106. A short squeeze in the near future up into that resistance zone would not surprise me at all. 

Trading Strategy (1 week): While we are pointing lower I will still look for lower prices to come. I expect the 95.17 level to be tested in earnest as the current bear flag pole pattern has a target just below that number. This seems like a dangerous market to be shorting breaks to new lows. Instead, I will be looking for counter trend rallies back into resistance for areas to consider establishing short positions. Keep tight stops as I do believe they could run this thing up to just north of 106 in a heart-beat if given the opportunity....

That's all for this post,
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
http://www.therationalinvestor.ca