Oil Technical Analysis October 17, 2011

Light Sweet Crude

The CL had a strong day on Friday, and managed to break the barrier set up by the last few days. The $90 level is more than likely the next massive barrier, and unfortunately we are just below that – so it is hard to buy at this point. We simply need to break above and close over the $90 to get bullish of this market for any real length of time. The highs are still getting lower, and until we break $90 – that will continue to be true. If it does happen though – this would constitute a resumption of the uptrend we saw earlier this year.

Brent

The Brent markets absolutely skyrocketed during the Friday session as traders continue to expect some kind of magic out of Europe over the weekend. The rally in all risky assets has been impressive, and if you happen to be long already, it could be time to take profits. The $110 level has given way, but the $115 and $120 levels are both above and waiting to push prices back down. At this point in time, it looks like we are going to get some long-term answers soon, but we still feel that selling is the way to go if we get some kind of bearish bar to launch shorts. Until we make a fresh new high, about the $116 level – we aren’t ready to fight the trend.