Oil Technical Analysis October 27, 2011

Light Sweet Crude

CL fell on Wednesday as the bottom of the Tuesday shooting star was broken. The price of Light Sweet Crude dipped to the $90 mark, and it is there that we feel the real fight is going to start. If we break lower than the lows from Wednesday, this market will fall quite a bit. However, with the recent volatility in the markets, it is entirely conceivable that this market bounces around in an erratic manner. With the recent price action however, we still feel this market is going to be range bound, with a downward bias, at least until we break the highs from the Tuesday session.

Brent

Brent markets broke below the bottom of the Tuesday hammer, signaling bearish price action. The market wasn’t able to break of close below that level, so a rejection of price is seen. The Brent markets are at the top of their range though, and as such we still feel selling is probably going to be easier for his market overall. If we can break above the $120 level, we see a new bull market in this commodity. Otherwise, we continue to range trade this market between $120 and $100.