Crude Oil Forecast October 21, 2014, Technical Analysis

Light Sweet Crude

The light sweet crude market fell initially during the course of the day on Monday, but found enough support near the $81.50 level in order to form a hammer, which is in direct opposition of the shooting star from the Friday candle. That being the case, it appears that the market really hasn’t made up its mind, and that we are simply going to continue to grind away sideways at the moment.

If we can break back above the $86 level, we feel that the market then heads to the $90 level, and then possibly the $95 level. However, there are a lot of different areas above that could cause resistance, so we are still sellers on the whole. We are looking for resistive candles in order to start shorting this market, as the trend has been so strong for quite some time.

Brent

The Brent market fell during the course of the day here on Monday as well, but the $84.50 level offered enough support to turn things back around and push the market higher. That being the case, the market looks as if it will continue to grind away, simply because we are oversold and the market looks like it’s going to struggle to make a decision where the other. Ultimately though, we feel that this market should then find a way to make an impulsive move, but it certainly can do it at the moment.

If we do break above the $90 level though, we feel that this market could go as high as $97 given enough time. That might be a nice retrace of the massive downtrend we have seen for some time. On the other hand though, we have broken down below some significant support, and as a result we think that we would more than likely end up testing the next significant support of level. With that being the case, a move to the $80 level is in exactly out of the question anyway. Ultimately, the market will find its footing at a lower level, but it does look ready to do so at the moment.