Crude Oil Price Outlook – Crude Continues to Test Resistance

WTI Crude Oil Technical Analysis

The light sweet crude oil market has shown itself to be a little hesitant on Wednesday as we are approaching a significant amount of resistance. All things being equal, I am perfectly fine shorting this market mainly due to the massive resistance above.

However, it is also holiday trading, so I don’t know that you need to be in a quick hurry to start shorting. After all, Thursday is Christmas and there will be limited hours on Friday. Because of this, you will have to be very careful in this market, as well as others.

Technical Resistance and Supply Dynamics

The 50-day EMA and the downtrend line both continue to offer a ceiling in this market. Demand being very small compared to the massive amount of overall supply that we have suggests that we are going to continue to see downward pressure overall. I think most of what you’ve seen recently has been short covering.

Brent Technical Analysis

Brent looks very much like a market that is testing the 50-day EMA and downtrend line just as the light sweet crude oil market is. It’s the same story here. We’ve bounced quite nicely in a downtrend and now the short sellers are going to come back and punish Brent. Over the next couple of trading days, you will see crude oil struggle a bit and once we get back to full volume, I definitely think we’re probably looking for people to start shorting.

At this point, there are no real signs of a trend change, and I think this is still a scenario where sellers will be active over the next several sessions.

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