Crude Oil Prices for the week of January 21, 2013, Technical Analysis

Light Sweet Crude

The light sweet crude market broke down to the upside over the last five sessions as the $95.00 level finally gave way. Not only was this a significant resistance level from a longer-term perspective, but it also was just above the top of last week’s shooting star. Because of this, it does look like quite a bit of resistance was broken out of and we should go higher.

Looking at the charts, it appears that $98.00 will be the first stop, and then the more obvious stop is the $100.00 level. Above their, we would run into quite a bit of noise and resistance, but the reality is that the bulls have definitely seem to have stepped in and taken control over the last several days. With all that being said, it can be very difficult sell this market, and simply buying on pullbacks could be the way to go, or perhaps a breaking of the week’s highs.

Brent

The Brent market had a very solid showing this week as we close just under the $112.00 level. The candle closed the very top of the range, and is threatening the top of the shooting star from the previous week. With this being said, it does look like bullish pressure is starting to get to the Brent market, and as a result a breakout is almost eminent.

Going forward, we believe that a break above the $113.00 level will open the gates to the $116.00 level. This level should provide a lot of resistance though, and a move above it would certainly take something special by the bulls. The markets are likely to remain range bound between the $116.00 and $104.00 levels for the rest of the year. There is a lack of demand, but there is also the Federal Reserve that is willing to print US dollars in order to devalue it. Because of this, Brent markets will get a bit of a boost from simply being a commodity. As for selling, we won’t do it until we get the upward break out, and some resistance – preferably near $116.