Crude posted huge gains on moderate volume Thursday as U. S. equities experienced another large movement upwards. As predicted, Wednesday's selloff in reaction to higher inventory levels was overdone, and the shorts paid for it yesterday.

Investors are gearing up for Sunday when OPEC will meet with another production cut in the works. Crude futures leapt above our two uptrend lines and our 1st tier downtrend line. However, our 2nd tier downtrend line is presently weighing down on the futures.

Even if the crude futures can put together another solid rally today, they still face the psychological $50/bbl level, and it wouldn't be surprising to see the futures selloff on the news of OPEC cuts. We cannot forget there is still a massive downtrend at work, and crude futures will ultimately need stabilization on the demand side for price to truly bottom.

The U. S. will release consumer sentiment data today which should have a considerable impact on equities and crude futures since consumption has fallen off a cliff during the crisis. Meanwhile, if crude futures can pop above March highs we could see large near-term gains.

Fundamentally, we find supports of $46.24/bbl, $45.24/bbl, $44.89/bbl, and $44.29/bbl. The $45/bbl area becomes a psychological cushion with $50/bbl serving as a key psychological barrier. To the topside, we see resistances of $47.09/bbl, $47.26/bbl, $48.36/bbl, and $49.14/bbl. Crude futures are currently trading at $46.66/bbl.

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