The WTI Crude market had a very strong showing during the session on Wednesday, as we initially fell, but the buyers stepped in to push it higher. What's interesting about this chart is the fact that we managed to close right in the middle of the "noise" going all the way up to the $98.00 level. The candle formed a hammer, which can be a very bullish sign at the top of a move like this. It shows that there is significant pressure to the upside, and a break above the highs should have this market aiming for $98.00, and possibly punching higher.
Alternately, a break below the bottom of the hammer would make it a "hanging man." That is a very bearish sign, as it shows the buyers getting blown out and the market starting to fall. However, the suspicion is that any pullback in this market should be a buying opportunity going forward. Even with the US dollar appreciating in value, oil has performed quite well. This is not a small feat, and it should be noted with appreciation.
Spring Range?
It is possible that we are setting up a springtime range for this market. It happens quite a bit in the oil markets, and as a result this market is one of the more technical and favored markets of people like myself. I think that ultimately we will see higher oil prices, but that time is not quite here yet. I do believe that $100 a barrel will more than likely be a bit of a lid for this market. In fact, I think that even $98 might be a bit of a stretch.
On the downside, I can see the $90 level as being very supportive, and as a result I think we are trying to form some type of range between $98 and $90. I would be willing to stretch that out as much is $100, but not any farther. If we can get above $100, that would below the range theory out of the water. So right now, I am looking for more strength for the short term, but think over the next couple of sessions we should get some type of resistive candle that is a sellable event.
