Crude Oil Forecast August 18, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market as you can see initially fell during the day on Monday, but found $42 to be supportive yet again. With this, we ended up forming a bit of a hammer at this point in time for the second session in a row. This shows that we should have buyers in this general vicinity, and as a result we are looking for a bounce at this point in time. We recognize that this market is very much bearish though, so the only way you should be able to buy this market is if you can handle quite a bit of volatility. However, the $42 level below was the site of a massive bounce to the $60 handle recently. Ultimately, we think this that quite a bit of volatility but we are getting a bit “long in the tooth” when it comes to this downtrend.

Brent

Brent markets went back and forth during the course of the session on Monday, showing the $49 level to be a magnet for price. We also see quite a bit of resistance at the 50 barrier to be in this market place, so it’s very likely that we will simply consolidate in this area. Short-term buying opportunities may present themselves on a break above the top of the range, but we would not hang onto this trade for any real length of time until we can clear the $52 level with significant.

We do recognize that a break down below the lows for the session on Monday might be a selling opportunity, as it would more than likely send the Brent market looking for the $45 level given enough time. We believe that this market will continue to be volatile though matter what happens, so unless you have the appetite for such volatility we would recommend staying out of this market. Also, you have to keep in mind that we are at the end of the summer, and that of course affects the volume of this marketplace. With this, the favored trade will more than likely be found in the light sweet crude market.