Despite the recent whipsaw around the medium term range highs, the overall setup continues to suggest a
bullish bias. Note the reversal from last week’s low effectively held key support in the 82.40 area and well
above the critical 81.20/47 zone. Again, as outlined in recent updates, we continue to view the price action
above the 2010 lows as part of a broader basing pattern rather than a corrective process. Moreover, long term
oversold momentum measures is consistent with the basing view.
As such, the backdrop for additional upside remains intact with this week’s price action suggesting a growing
risk that the trending bias is back on track. The 85.18 February high will now act as the first key test with
breaks affirming the breakout view. New highs see initial resistance in the 85.23/50 zone followed by the 86.45
area (50% retracement and July ’10 peak). Still, medium term risks point to a test of the 89/91 zone which
includes the double bottom target, the June ’10 high and 76.4% retracement from the 94.49 April ’10 high.
Note that near term pullbacks should now find support at the 82.65/43 area, while the late‐January low near
81.47 should act as a short term floor.
Strategy: Buy 1 unit at mkt risking 82.25 targeting 90.00.