Crude Oil Price Outlook – Oil Continues to Recover on Monday

WTI Crude Oil Technical Analysis

The light sweet crude oil market has rallied pretty significantly, about 2% right off the bat on Monday, as we have seen a nice pop higher. That being said, keep in mind that this is a very negative market, and there are a lot of things out there working against crude oil. There is a very real possibility this could be short covering, as most of the market has been short for quite some time. They may be taking their profit ahead of the holidays.

When I look at this chart, the 50-day EMA and the downtrend line both come into the picture as resistance above, and I will be looking for any signs of exhaustion that I can take advantage of so I can start shorting this market again. Obviously, Thursday being Christmas has a major influence on how we trade this week, so this might even be a next week setup. We will just have to wait and see.

Brent Technical Analysis

Brent markets look very much the same. They are up just about the exact same amount as light sweet crude markets are, with the 50-day EMA and the downtrend line both coming into the picture at about $63. I think that is your lid in the market at the moment, and on signs of exhaustion, I would be more than willing to fade here as well.

Again, I think a lot of this comes down to the fact that it is that time of year when people get out of the market. But at the same time, it is worth noting that both of these markets have bounced from a major support level from back in the spring. So we will see; maybe that is the floor. Maybe we do not go any lower than that, but I certainly do not think this has suddenly become a bullish market, so I will look for shorting opportunities.

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