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Posted January 19, 2013 3:56 (GMT) | By FX Empire Analyst - Christopher Lewis | Print | Font Size | Add a comment
Light Sweet Crude
The light sweet crude market continued to churn above the $95.00 level on Friday, confirming the breakout that we’ve seen over the last 48 hours. Looking at this chart, it appears that we are going to head towards $98.00 in relatively short order, followed by the $100.00 level that should be resistive. Whether or not we get above that level is probably a different question altogether, but we think that the market certainly has a bullish outlook to it at the moment.
One of the main reasons is that the Federal Reserve continues to show an easy policy, and as a result the US dollar will be devalued. With that being said, this is more or less a commodity play than oil itself. In other words people were trying to find something to preserve their purchasing power and oil is always a good bet.
Looking at this chart, selling is obviously not a possibility at this point as there appears to be a massive base that has formed in this market from the $95.00 level all the way down to the $92.50 level. With that in mind, this is a “buy only” market, however we do not expected to be a straight shot up, and we will see pullbacks from time to time. With that being said, this looks at the type of market you want to buy on the pullbacks.
Crude Oil Prices January 23, 2013, Technical Analysis Brent The Brent markets had a strong showing on Friday after initially falling below the $111.00 level. In fact, it was at the $110.50 level that the market found support and we bounced much higher, closing just below the $112.00 level at the end of the session. Within this chart, the candle that formed is a big hammer like candle and does show significant support. Nonetheless, the shooting star from last week that ended at the $112.50 level should provide plenty of resistance as well.
Ultimately, we feel that the $113.00 level will be resistive as well, and is the actual breakout point that we need to see in order to get overly bullish of the Brent market. We think this is possible, but it will be choppy or last couple days and as the Light Sweet Crude market has already broken out, this will probably be the least favorite of the two markets. Having said that, selling still isn’t something that we are interested in.
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