WTI/CL Technical Analysis
The light sweet crude oil market has rallied pretty significantly during the trading session on Thursday, as we broke higher and even broke above the 50 day EMA at one point. All things being equal, this is a market that I think is testing the bottom of a major consolidation area. And it is worth noting that I feel like I’ve been talking about the $65 level since the beginning of April. And well, I have, it’s an area that the market seems to be in balance. And therefore, I would anticipate there’s probably some defending of the level.
If we do rally from here, the 200 day EMA is at the $68.20 level and then the top of the potential range is $70. So, I do think that the upside is somewhat limited. But ultimately this is a market where I like the idea of buying short-term dips, but I’m not hanging on to it for a big move because quite frankly, momentum just isn’t there.
Brent Technical Analysis
Brent has done very much the same thing and in the case of Brent, it’s the $68 level that I am watching. The 50 day EMA sits just below current trading, and at this point, it is worth noting that we did rally but gave back those gains rather quickly. I think that’s a bit of a microcosm of what we are going to see. We are going to see the market just chop back and forth with no real directionality and it will be very noisy in the process.
If we were to break down below the $68 level, then it opens up a move to the $66 level underneath, which was a swing low. To the upside, the top of what could be the range is probably bordered by the 200-day EMA just above the $71 level. I expect to see lot of choppiness, but I do favor the seasonal trade, which means we should be grinding higher, but it’s going to be a slow, painful grind.
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