Crude Oil Back into the 80s?

Published on Sunday, 25 July 2010 22:31 Written by The Trader Next Door

New York, Jul 25^th (TradersHuddle.com)  - Crude oil ended the week trading at $79 a barrel, which puts it in position to make a run towards the $80 level this week. Oil rallied with the market this past week, and had an important breakout last Thursday, as it can be evidence on the technical chart of the United States Oil Fund (NYSE:USO).

The USO had a hard time for the past couple of weeks in getting back above the 50 day moving average, especially after a false breakout or fake out on July 14^th. Last Thursday, the USO was able to finally close above the 50 day moving average, and most importantly on Friday was able to book a weekly close above the important $35 level.

Technically oil, appears to be range bound, however it appears to be moving towards the high end of the range as the price action puts it on pace for a possible test of the 200 day moving average area, which in essence translates into another 4 to 5% of upside for the price of oil.

Key resistance that traders will be watching during the week is at $79.50 from there the next level of interest for the price of oil is $82.50.