Crude Oil Prices December 10, 2012, Technical Analysis

Light Sweet Crude

The light sweet crude market initially tried to rally during the Friday session, but was stalled at the $87.00 level in order to fall and form a shooting star. The shooting star suggests that we could see lower prices in the near-term, and we do recognize the fact that a break down below the $86.00 level will put significant pressure to fall apart below the $84.00 handle. Because of this, we think that eventually we could see a breakdown in this marketplace, and would not hesitate to get aggressively short if we do manage to break below $84.00. Nonetheless, we do think that short-term we could trade a short position as well.

Any rallies that happen in this marketplace will more than likely only make tempting sell situations going forward. It really isn’t until we get above the $90.00 level that we can even consider a rally as being valid.

 

Brent

The Brent market rose during the session and trying to break above the $180.00 level, but failed at that point and fell to close at the $107.31 level. The shooting star that we have formed suggests that we will attempt to break down from here, and we do think that a run down to the $105.00 level isn’t out of the question right now.

Because of this chart, we are ready to start selling a break below the $106.50 level as it would show that the door has been opened up to reach the 105 $.00 support level. Also, we are more than willing to start selling rallies as they show signs of weakness. We see nothing but noise and resistance all the way to the $112.00 level above, and don’t see a catalyst to have prices bust through it.

However, we do know that the Middle East can cause headlines that will move the oil markets. Because of this, there is always the chance that some type of news item comes out that makes oil prices skyrocket, but more than likely that knee-jerk reaction will simply be an opportunity to start fading as well.