Jan '07 Crude Oil contract looks poised to re-test previous highs

The Jan '07 Crude contract looks poised to re-test "technical" resistance @ 63.77 levels. New price momentum as noted by the early December MACD peak have created a setup (see circle) in the form of a mild pullback in price. With current low ADX levels, expect some form of price expansion. In turn, expect oil stocks to rally in kind. Short-term key fundamentals drivers include: 1) seasonal warm weather forecasts 2) anticipated OPEC forecast cuts 3) Crude oil inventory supply numbers due tomorrow (Wednesday 10:30 am).