Crude Oil Forecast March 21, 2014, Technical Analysis

Light Sweet Crude

The light sweet crude markets initially try to rally during the session on Thursday, but as you can see the area above the $100.50 level offered far too much resistance. The market turned back around and closed below the $99.50 level at the end of open outcry. However, we see plenty of support just below the current trading level, and therefore we feel that the market will more than likely attract buyers in the short-term. We are looking for some type of supportive candle in order to start buying as we would expect this market eventually hit the $100 level, but to think that it was going to be a short-term and smooth move was probably asking far too much.

With this in mind, we have no interest in selling and believe that there is plenty of support only down to the $97.50 level. It is not until we clear well below there that we would even consider selling, probably closer to the $95 level.

Brent

The Brent market went back and forth during the session on Thursday, and unlike the light sweet crude market, the Brent market found itself actually gaining by the end of the day. It makes sense though, we are sitting on top of massive support, and this is the area that we would fully anticipate seeing some type of supportive candle. This supportive candle would be a decent buying opportunity as far as we can tell, because we are sitting in such a massively congestive area. However, we don’t necessarily have the right candle shape yet. At the end of the day though, this is a larger consolidation area that extends all the way down to the $105 area or so on the bottom, and the $112 area or so on the top. We think that eventually this market will support itself in this general vicinity, and a break above the supportive candle would be the buying opportunity that we are in fact looking for. Don’t get us wrong, we think it will be a choppy move all the way back up to $112, so think of this more or less as a longer-term set up.