Crude Oil Forecast November 30, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market fell rather significantly on Friday, as the $43.50 level above continues to offer resistance. The resulting negative candle ended up swallowing most of the hammer from the previous session, and that of course is a very negative sign. However, there is quite a bit of support just below so we actually will wait until we get to rallies in order to start selling. We don’t have any interest in buying this market at all, and believe that the $43.50 level will continue to be massively resistive. If we did break above there, we also have a massive amount of resistance at the $45 level, so there is really no scenario in which we are willing to start buying this market. We think that there is a significant amount of support down near the $40 level, so if we can get below there we would become massively short of this market. In the meantime, we are playing short-term charts.

Brent

Brent markets fell during the day on Friday as well, breaking down below the bottom of the range from Thursday which of course is a fairly negative sign. We find yourselves below the $45 level, and it looks as if the market is going to reach down towards the $43.50 level next. That is an area that is massively supportive, so at this point in time we realize that a move lower will have to struggle at that area. If we can get below $43.50 though, this is a market that could go much lower, probably reaching towards the $40 handle as it is the next large, round number. Rallies at this point in time should be selling opportunities as well, as the US dollar continues to strengthen in general which of course works against the value of the commodity markets in general. Given enough time, we do think that the breakout is coming, but in the meantime we simply have to sell short-term rallies that show signs of exhaustion in order to take the profits of there being offered at the moment.