Oil - Correction within a month? August 13th 2005

Oils rally the past weeks has been impressive. I wouldn't recommend anyone to go short on oil but it looks like there is a good chance we could get a nice correction before the winter heating season at least to the $60 area, maybe even $55. This would provide a nice buying opportunity. At the moment oil is quite overbought and the funds are rather long with commercial net positions clearly in the red again. COT has by no means as much significance in oil as it does in gold and silver, but the COT numbers can still be worth looking at in oil as well. Simple TA tools like trend lines and RSI with moving averages have worked well in oil.

If past performance gives any indication of future performace I believe oil will retreat towards it 50 day MA within a month.

August 13th 2005

Carl Löfberg

Tampere, Finland


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