Crude Oil Forecast October 28, 2014, Technical Analysis

Light Sweet Crude

The light sweet crude market fell initially during the course of the day on Thursday, as we have seen several times in a row now on the daily chart. However, we did find enough support just above the $79.00 level to form a nice-looking hammer, and as a result we believe that the market will continue to consolidate between the $79 level, and the $85 level above. In the short-term, we think that any bounce will run into a lot of trouble at the $83 level, so we are not interested in buying.

We will simply wait until we see a little bit of a rally with a resistant candle in order to start selling yet again. On the other hand, if we broke down below the $79 level, we would start selling their as well. We don’t really have a scenario in which we want to start buying the light sweet crude market below the $85 level.

Brent

The Brent market fell during the session as well on Thursday, but found support near the $85 level as well, as we bounced enough to form a hammer. The hammer of course suggests that the buyers are going to step back into the market, but ultimately we believe the market should continue to go lower. Because of this, we are not willing to start buying and we recognize that it is not until we get above the $90 level that we could even consider doing so. A resistive candle between here and there would be a reason to sell yet again, but in general we believe that the market is probably going to be more choppy and sideways than anything else over the next several sessions.

We do believe that this market ultimately goes to the $80 level, but it might take a little bit of effort to get there. We certainly wouldn’t have any interest in buying at this moment as the market certainly continues to struggle to maintain any type of bullish momentum. All things being equal, we are sellers.