Oil Technical Analysis October 13, 2011
Light Sweet Crude
Your capital is at risk
The CL contract had another quiet day on Wednesday, defying the recent run up in pricing. The market is currently at the $85 area, and it is finding the going difficult. However, the bears haven’t exactly stepped in and pushed prices down either. Because of this, we think there is a move coming in the near future, as the market has been so tight over the last 48 hours.
The market looks like it is going to give this market a hard time, and it should be stated that the highs are progressively getting lower. Also, the market hasn’t risen with equities, which shows that the oil traders might not believe in the rally like so many others do. This could be thought of as a warning sign. Because of this, we are looking to sell, but only on signs of exhaustion.
Brent
The Brent market had a positive day, but the daily candle has formed a shooting star. This candle is a sign of exhaustion, and also a sign of a possible reversal. If this holds true, this would be another lower high in this market, and would get us aggressively bearish of Brent. We are willing to sell on a break of the Wednesday lows.