By: DailyForex.com
The WTI Crude Oil market went back and forth during the Friday session, stopping just below the $94.00 level. This area is fairly congested, but the real consolidation in my opinion is between the $92.00 level below, and the $97.00 level above. Because of this, I feel that there is probably more upside in this market than down, but quite frankly this market will more than likely just grind sideways overall. Is because of this that on this chart I have the four-hour time period chosen.
.jpg "Crude Oil may 27")
The overall fundamentals of crude oil will be challenged as we try to decide whether or not the economy in the United States is picking up significantly enough to argue for higher pricing. After all, there does come a point where the starts to hurt the average consumer, and of course puts a drag on the economy as a whole. With that being the case, a lot of traders will launch this market closely, and a serious breakout in either direction will certainly have ramifications in several other markets as well.
Range bound trading ahead
It looks like this market will continue to chop sideways overall, so I am basically looking at it as a short-term trading environment. I think that taking a long position near the $92.00 level of course is a reasonable course of action, but even if we break down below there, I believe that the $90.00 level will be just as supportive. Nonetheless, I would anticipate that you must take very short-term trade at best, keeping stop losses tighter than usual.
If you have the ability to trade using options, that may be the way to go going forward. After all, you can limit your risk, and the find everything at a time. Short-term binary options may be anything better option for trading this market, and of course the CFD markets will offer you the ability to trade small enough positions to keep this choppiness from damaging your account too much. Trading the futures market in this type of environment will be very difficult to do unless you have a fairly large account size.