Crude Oil Forecast March 3, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market initially fell during the course of the session on Monday, testing the $49 level. That being the case, the market did bounce and clear the $50 level given enough time. However, we believe that there is a significant amount of resistance above at the $55 handle. With that being the case, we believe that a break above the $51 level should continue the consolidation that we have been in for some time, and therefore making it a market that you can buy for a certain amount of time, as a short-term set up. On the other hand, if we break down below the $40 level, we feel this market should then go to the $45 handle. The market is most certainly in a downtrend overall, so we certainly favor selling this market as opposed to buying it. This is why we are more aggressive to sell on resistive candles at the $55 handle.

 

Brent

The Brent market fell during the course of the session on Monday, testing the $60 level for support. We did find a down there, but eventually bounced just slightly. Ultimately, the market should continue to bounce around this general vicinity as the entire region was supportive recently. With that, the market then offers resistance according to classic technical analysis, and as a result if we break down below the $50 level, this market should then drop to the $55 level, and if we can get below there go looking for the $50 level.

On the other hand, we could buying this market on a break above the $65 level as it would show a significant breakout to the upside. At that point in time, the market would then head to the $70 level next according to our technical analysis. Nonetheless though, we are most certainly in a downtrend still, so we are much more comfortable selling this market. Regardless, there is a lot of volatility in this general vicinity, so we the way you’re going to have to be very resilient to hang onto the trade.