The WTI Crude Oil market initially fell rather significantly during the session on Monday, but you can see that the area around the $96.00 level did in fact caused enough support to bounce this market back above the $97.00 level and form a hammer in the process. To me, this signals that the market wants to go higher, and will eventually break through the $98.00 area.
Above there, I see quite a bit of noise all the way to $100.00, but I don't think that the market will be stopped if we can get above this area that we now face. Above that area, I would have to believe that there is a significant amount resistance facing the market, and quite frankly I feel that the market is a bit ahead of itself have this point in time. I still believe that we will more than likely see a range between $90.00 and $100.00 during the course of spring and summer in North America.
You have to keep in mind that this market is more or less a play on North American growth, and as a result this may be a statement on America and Canada more than anything else. If there is substantial growth in those countries, it stands to reason that there will be more demand for oil.
Range bound
Going forward, I still think that this range will be respected. It does look like there is quite a bit of buying pressure at the moment though, but if you are not in this market already it's going to be hard to buy oil at this high level. After all, there is much more room to the downside than the upside at the moment. If you are bullish of the market, I would definitely recommend some type of pullback first.
I believe that a selling opportunity is coming just above, and as a result I will not be taking the long side of this market even though I see this beautiful looking hammer. I am waiting to see the resistive candle in order to play the range, and until then I will remain on the sidelines.
