Crude Oil Prices December 28, 2012, Technical Analysis

Light Sweet Crude

The light sweet crude markets had a very sideways session during the Thursday trading hours as we continue to hover around the $91.00 level. However, we did initially fall towards the $90.25 level, but got a bounce late in the day. This essentially sets up more consolidation between $90.00 and $94.00. Out of all of the markets that we follow right now, this is by far one of the most consolidated and perhaps choppy ones out there. Because of this, it is difficult to play unless you are dealing with one of the outer levels. We still believe that this market will run into serious headwinds just above, and we are looking for some type of resistant candle from which to start selling. It isn’t until we break above the $94.00 level that we are interested in buying at this point, because we see ourselves being stuck in a big resistance area.

With that being the last couple sessions of the year, it’s difficult to imagine a scenario where we break out in one direction or another with any significant. Because of this, we are more than likely going to be out of the market as it will continue to bounce around sideways and somewhat erratically because of the lack of participants in the marketplace.

The Brent markets rose during the session and actually cracked the $110.00 level. In fact, one point in the session we managed to see a serious attempt on the $112.00 level, which is where we suggest that buying, could be done in this marketplace. Granted, we have placed a short-term buy position in this market on a move above the $110.00 level, but if we managed to get above the $112.00 level on a daily close, we would be willing to not only buy this market, but hang on for a longer-term trade. However, as you can see the $112.00 level has not been violated, and as such we are far too close to that level in order to start buying. Alternately, it could be very difficult to start selling against a large candle like this. With this being a very illiquid market, we are essentially “stuck.”