Hello and welcome to CantosCharts. This is Sandy Jadeja, Chief Market Strategist with CMS FX.

In this video we'll be taking a look at crude oil. Straight away we'll look at the current trend and this is the weekly chart and we notice something which is very, very apparent. We had a very severe decline from the $144 level back in June 2008. Crude oil stabilised at $50.5 in February '09 and since then it has been in a steady uptrend but we haven't seen any dramatic moves towards the upside.

What's interesting with crude oil, though, is how it has been hugging its 20 period moving average. It has been trading both on the upside and the downside of this moving average.

If we take a look at the momentum index we had seen a buy signal in March 2010, but it has been quite a weak move towards the upside. But if I look at this particular chart we can clarify that this move is a retracement towards the previous downtrend. Momentum is bullish, but it's actually quite weak and also we are trading above the 20 week moving average.

Now the daily charts we can see that recently the $85.95 had been a resistance point. Oil came down to $70.75 and since then has traded above, but also broken above the $85.95.

We have noticed though with crude oil it has been trading in a sideways channel. With a break above this $85.95, traders have been excited by thinking that we're now going to be heading back towards the $100 mark.

Well, we are trading above the 20 day moving average, but on the momentum index we've seen a sell signal as of last week, so that's quite negative. But considering that we're trading in a sideways channel, we're likely to see choppy price action and mixed signals on the momentum index.

I would like to see oil hold above $83.80. If we take out $83.80, then $82.40 and $82 would become the support target. But as long as we're above $83.80 and we can clear above $87.59, the recent high, $90 and $95.37 become the upside target.

So we are currently in a short-term intermediate term uptrend. We're trading nicely above the 20 period moving average on the short-term and the intermediate term trend, although we've been trading both on the upside and the downside of the moving average. We must hold above the $80.60 on the intermediate term trend. A break below $80.60 would signify that crude oil may have backed down towards the $75 mark. But my upside target would become $90 to $95.

Have a great trading week. This is Sandy Jadeja for CantosCharts.