Crude Oil Prices December 6, 2012, Technical Analysis

Light Sweet Crude

The light sweet crude markets fell rather rapidly during the session on Wednesday after the Tuesday shooting star had suggested that the $90.00 level would be far too resistive for the buyers to take out. Because of this, we had actually issued a sell rating on this yesterday, and now you should be in profits. However, as we look at this chart we do see a lot of noise to the downside, and think that breaking down below the $86.00 level will be difficult. This doesn’t even take into account the absolute bottom of resistance at $84.00, and as a result we think that there is going to be a general choppiness to this market overall.

With this being said, we are more than willing to take profits at the first signs of support. However, at this point time we do not have that and are willing to hang onto the trade for a little while longer. As for buying is concerned, we have no plans to do so at the moment.

Brent

The Brent market did much the same during the Wednesday session, and looks very similar on the whole. We are just above the $108 level, which we see as massive support. However, we have broken down below it before, and as such we are more than willing to let it prove itself and keep the trade going.

As for buying this market, we have no interest until we get well above the $112 level on a daily close. This would suggest of the momentum has switched from sellers to buyers, but we think that with a potential run to safety in the near-term and the fact that we are heading towards the holiday season, many traders will be booking whatever profits they have for this year in this market. Overall, we think that weakness will follow, and that global slowing will also play a big part in the evaluation of this market. Unlike the light sweet crude market, Brent is heavily used in Europe, and this of course will play a part as well.