Crude Oil Forecast October 21, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil markets fell during the course of the session here on Thursday, reaching back towards the $50 level. There is a significant amount of support all the way down to the $49 level, so having said that I think that sooner or later the buyers will return. With this being the case, waiting for a supportive candle on a shorter-term chart might be the way to go, as you can simply play the upward grind in this market. If we break down below the $49 level, we very well could go even lower. With this, it’s likely that the market continues to see a lot of volatility. I believe that this market probably continues to be very difficult to trade from a longer-term perspective, and will continue to be short-term friendly only.

 

Brent

The Brent markets fell significantly during the course of the day on Thursday as well, reaching down towards the $51 level. There is quite a bit of support just below though, so although this is a very negative candle, we might find buyers returning to the market fairly soon. If that’s the case, we should then bounce from here in order to continue the consolidation that we have seen time and time again in this market. A break down below the $50 level would be negative enough for me to start selling, as I believe there is a zone of support between $51 and $50.

Ultimately, this is a market that is going to continue to be bounced about the charts due to comments coming from OPEC, Russia, and a host of other players. However, I would say that the one thing you have to keep in mind about this market is that the higher oil goes, the more likely the Americans will continue to add production as they have been doing for the last several weeks. If that’s the case, it’s very likely that the oversupply issue will continue to hound this market overall, meaning that we will never be completely free to explode to the upside for any real length of time.