Crude Oil Backs Off Near Stiff Overhead Resistance

march_crude_oil-2011.gifCrude oil futures for March delivery on the New York Mercantile Exchange on Tuesday backed down on some profit-taking pressure from the recent strong gains. The past two sessions had seen prices tack on over $6.00 a barrel, in the wake of the Egypt civil unrest. March crude oil prices Tuesday rallied to a fresh two-week high of $92.45 a barrel, before backing down on the corrective pullback. There is strong overhead chart resistance located at the January high of $93.46. A close above the January high would provide the crude oil bulls with fresh upside near-term technical momentum to then suggest quick move to $95.00 and then a challenge of major psychological resistance at $100.00 a barrel. Recent price action in crude oil has now defined a clear near-term trading range, bound by the January high of $93.46 and by last week’s low of $85.11. A close below strong technical support at $90.00 in March crude oil futures would begin to deflate the bulls a bit, and would also suggest prices trading sideways in the aforementioned range for at least the near term. Stay tuned!–Jim Wyckoff