Aston Villa face Swansea City in a match of vital importance at the weekend.
Villa are under increasing pressure, after making an awful start to the season, and they could have let their heads drop after losing at Stamford Bridge.
However, Sherwood insists that the outlook at Villa is a positive one, and he is optimistic for their future heading into this weekend's match against Swansea City.
"I was encouraged with a lot from the Chelsea game - we went to Stamford Bridge and matched the champions.
"We have belief. Obviously not winning games doesn't breed a lot of confidence. But it's encouraging for me how positive the boys are.
"They realise they can match teams like Chelsea and we have to take into the next game, which is very important."
Villa have failed to win a Premier League match since the very first day of the season, and they are currently sat in 19th place in the table.
The Claret and Blues have looked out of sorts throughout the campaign so far, but their performance levels did improve against Chelsea.
Sherwood's side had much of the early play at Stamford Bridge, but individual errors proved costly and they ultimately fell to another defeat.
Villa are now four points adrift of safety, but their match against an out-of-form Swansea side appears to be a winnable one if they are able to produce their best.