Crude Oil Prices for the week of May 20th, 2013, Technical

Light Sweet Crude

The light sweet crude market fell during much of the week as the commodity markets in general got a bit of a thrashing. However, we found quite a bit of support down at the $92.00 level, and as a result we did get a bounce later during the five sessions. Having said that, we managed to finish just underneath the $96.00 level, and as a result formed a nice looking hammer.

The biggest concern that we have now is the fact that there are so many resistance levels just above. Also, you have to ask yourself whether or not a break above the $100.00 level wouldn’t wreck a lot of the other markets that tend to show risk appetite being strong. Because of this, it’s very possible that we have somewhat of a limited upside at this point.

Going forward, we fully expect this market to continue to be choppy, and as far as a long-term trader is concerned, there are far too many resistant areas just above that could cause problems going forward. In fact, it really isn’t until we close well above the $100.00 level that we are prepared to buy on a longer-term perspective. We don’t expect that to happen, so more than likely we simply won’t be long of this market on a longer-term timeframe. Also, there is obviously far too much support on the two previous hammers to short it as well. As for long-term traders, this market is not a friendly one to be involved in.

Brent

The Brent market also formed a hammer, and just like the light sweet crude market formed it just below a lot of noise. While it isn’t as clear-cut as the light sweet crude market is, we could see that there is a significant amount of resistance just above the current price. Because of this, we are not interested in trading the Brent market at the moment from a longer-term perspective. In fact, it would not surprise us at all if the summer was very quiet