The events in Egypt have pushed oil towards new highs but this remains a rally rather than a new uptrend. Nymex crude has been unable to breakout above the upper level of long term resistance near $109.
The fear in oil markets is that the current price activity is part of a new long-term uptrend that may see oil reach highs of $120 or $130. The chart suggests these fears are unfounded because oil trades in well-defined trading bands. The breakout above resistance near $98 had a target projection near $109. Despite the ongoing unrest in Egypt, oil has been unable to breakout above the $109 resistance level.
(Read more: Egypt risk premium built-in, limiting oil's gain)
The weekly Nymex chart shows four levels of support and resistance.