Crude Oil Forecast February 29, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market rallied during the session initially on Friday, but found the area near the $35 level to be far too strong to continue above. By doing so, we turned back around to form a shooting star which of course is a very negative sign and therefore if we can break down below the bottom of the candle we are very quick to start selling when that happens. Ultimately, rally should continue to be selling opportunities as well, as it looks like there is more than enough exhaustion above to drive this market lower. We have no interest in buying, and we believe that it is only a matter of time before the WTI Crude Oil market runs down to the $30 level, and then perhaps even the $29 level which was recently the bottom of this market.

Brent

The Brent market initially tried to rally during the course of the session on Friday, but turned back around at the $37 level as it is massively resistive. That being the case, the market ended up forming a nice-looking shooting star which of course is a very good sign for the sellers. This is a market that should continue to go lower, and as a result the market should then reach towards the $30 level given enough time.

We don’t have a scenario in which we are willing to buy this market, because quite frankly the supply is far too strong for the demand. That is going to continue to be the way, and with that we are ready to sell every time we get an opportunity to. We look at it as “value” in the US dollar as the market rallies. The $40 level above should be massively resistive, and essentially the “ceiling” in this market. We remain very bearish of this market, as the longer-term downtrend should continue to control the market and at this point in time it’s difficult to imagine that the bearish pressure will subside anytime soon and therefore this is a one-way trade as far as we can see.