WTI/CL Technical Analysis
The light sweet crude oil market jumped significantly during the pre-market trading session on Wednesday. I think at this point, we will probably continue to see a lot of buyers in this market for short-term moves, but longer term, I think you have a major problem in the form of the $60 level. And it is worth noting that crude oil is very technically sensitive to support and resistance and indicators. It does tend to move in $10 increments.
And of course, the $60 level will feature a lot of those things, all coming together as it was not only a large, round, psychologically significant figure, but it’s also an area where we have seen quite a bit of support and resistance previously. In other words, I think this is a situation where we jump, but probably see some exhaustion above that we can start shorting. In the meantime, though, I think we continue to see a little bit of short-term positivity at best.
Brent Technical Analysis
The Brent market has bounced from the $60 level quite nicely, and I think you’ve got a scenario where you have to look at this through the prism of a market that you’re fading rallies as well. This market could jump all the way to the $65 level only to fail in that area. With this being the case, I like the idea of looking for long wicks on the top of a daily candlestick to start trading. If we were to break above the 50-day EMA, then that would change quite a few things, but with oversupply out there and concerns about global demand, I think we still have an uphill climb to try to turn things around.
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