Crude Oil Forecast October 14, 2014, Technical Analysis
Light Sweet Crude
The light sweet crude market did a bit of pain around during the session on Monday, showing the market to be comfortable consolidating between the $84 level on the bottom, and the $86 level on the top. With that, the market ended up forming a very neutral candle, perhaps even a hammer if you were a little bit liberal with the definition, meaning that if we can break above the $86 handle, we could bounce all the way up to the $89 level.
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We think that the market will more than likely find plenty of selling pressure above though, so if we break higher we are more comfortable waiting for a resistant candle in order to take advantage of the longer-term trend that is so entrenched in this marketplace. We believe that the $90 level above will continue to bring in a lot of selling pressure, so quite frankly any rally at this point in time is probably just going to invite more sellers to reenter the market.
The Brent market fell as you can see during the session on Monday, testing the $88 level. This area suggests that there are buyers in the general region, but quite frankly there’s no reason whatsoever to buy this market has we continue to see plenty of selling pressure. We believe that the $91 level is an area that sellers will step into the marketplace yet again, pushing this market down to reach the $85 level, the next major target that we have. Because of that, we feel that every time this market rallies on the short-term chart, sellers will step back into the marketplace in order to take advantage of the overall bearishness.
With that being the case, we are sellers obviously, and have no interest whatsoever in buying this market. In fact, we would probably have to move above the $97 level in order to feel that the trend is changing, and obviously we are quite away from that level. With that being the case, we just simply look for short-term selling opportunities to profit again and again.