Commodity Trading Tips for Crude oil by KediaCommodity

Ajay Kumar Kedia 17 April 2013

Crude oil trended lower to settled at 4794 down by -1.03% as concerns over the outlook for global economic growth continued to dominate market sentiment, but yesterday prices recovered from recent heavy losses, edging towards $89 a barrel on an unexpected drop in US crude inventories. Investors remained cautious after official data showed that the Chinese economy expanded by 7.7% year-on-year in the three months to March, down from 7.9% in the fourth quarter and undershooting expectations for 8.0% growth. Separate reports showed that Chinese industrial production also came in below expectations, while retail sales rose slightly more than forecast. The data reinforced concerns over the outlook for global growth after data on Friday showed that US retail sales fell 0.4% in March, the largest decline in nine months. On Monday, data showed that the Empire State manufacturing index fell to 3.1 in April, from a reading of 9.2 the previous month, compared to expectations for a decline to 7.0. Separately, Nicolas Maduro was elected president of Venezuela, the third-biggest oil producer in the OPEC. In its March 13 oil market report, the IEA said a Maduro presidency could see "a further degradation of the state oil company and the country's oil prospects." Meanwhile the API, said in its weekly report that crude-oil stocks fell by 6.655 million barrels, while refiners cut operations by 0.5 percentage point. Gasoline stocks rose 253,000 barrels, while distillate stocks rose 1.26 million barrels, API said. Now technically market is in oversold as RSI for 18days is currently indicating 28.79, and getting support at 4757 and below could see a test of 4720 level, And resistance is now likely to be seen at 4821, a move above could see prices testing 4848.