Crude Oil Prices January 10, 2013, Technical Analysis

Light Sweet Crude

Looking at the light sweet crude markets, you can see that we’ve done nothing for the last five sessions. We are currently sitting underneath the $94.00 level, which of course as you can see is significant resistance. Within this chart, it would take a break of the $95.00 level on a daily close in order to get bullish. We think that it could very well happen, but we need to do some serious work to break above it.

Looking this chart, it does look like the real danger is to the upside, but we managed to break below the $91.50 level, we would have to consider that this market is falling back to the $90.00 level in relatively short order. If that happens, it would suggest that we are going to consolidate somewhere near the $90.00 handle. This would also suggest that we would be stuck in a $4.00 range, as the $94.00 level will certainly be thought of as resistance at that point.

Brent

The Brent went back and forth during the Wednesday session, only to fall just slightly. We continue to hover above the $110.00 level, but well below the $113.00 resistance area. With this being said, it looks like the markets ready to go sideways in grind its way through the resistance to higher prices. However, this won’t be easy, and the fact is that there could still be a fairly significant lack of demand out there for energy.

If we managed to break above the $113.00 level on a daily close however, we would be more than willing to start buying. If that happens, we think that the next move will be to the $115.00 level, and then perhaps to the $120.00 level.

As for selling, if we can get below the $110.00 level, we believe that there is plenty of room to fall all the way down to the 106 $.00 level in relatively short order. If this happens, we would be breaking the bottom of two hammers as well as the support area, so this would be in fact considered to be a fairly strong sell signal.