Bloomberg News

Oil May Rise to $100 on Fibonacci: Technical Analysis

March 27, 2013

West Texas Intermediate may rise toward $100 after prices settled above a key Fibonacci level for a second day, according to a technical analysis by Iitrader.com.

The May WTI contract has climbed for the past four sessions and settled above $95.55 a barrel for the past two. That’s the 61.8 percent retracement level from a March 4 low of $89.79 on a three-month Fibonacci study. The price may test $100 if it breaches $97.92, the Feb. 20 intraday high, said Bill Baruch, a senior market strategist at Iitrader.com, a Chicago commodity trading firm.

“The $95.55 level is now the support,” Baruch said. The $97.92 price “is where the market broke down in February, and if we move above the level, the market will make new highs. We are looking at $100.”

Oil for May delivery gained 24 cents to settle at a five- week high of $96.58 yesterday on the New York Mercantile Exchange. Futures touched a three-month intraday high of $99.11 on Feb. 13. Prices last traded above $100 in September, and crude last settled above the level in May.

A breach below the 50 percent Fibonacci retracement of $94.44 may set a bearish trend for oil, Baruch said. The Fibonacci sequence of numbers is used by traders to predict areas of support and resistance as markets repeat earlier movements.

To contact the reporter on this story: Moming Zhou in New York at mzhou29@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net


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