Oil Forecast for the Week of January 23, 2012, Technical Analysis

Light Sweet Crude had a wild week as it continues to ping around in a tight range between $95 and $104 or so. The market has been dragged around by the Iranian situation as well as signs of a declining economy around the world. Demand simply looks to be fading at this point in time.

The shape of the weekly candle is a shooting star, and although it is “in traffic”, it does suggest that the pressure is building to the downside. A break of the bottom of the week’s range would be a decent sell signal for the next several dollars in this contract. $95 would be the next support, but it looks as if $90 is more important. With this in mind, we prefer selling on a break of the $98 mark, and would be willing to wait to see $90. We won’t buy until the $105 level is broken.

Oil Forecast for the Week of January 23, 2012, Technical Analysis
Oil Forecast for the Week of January 23, 2012, Technical Analysis

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