The WTI Crude Oil markets fell initially during the open on Monday, and as you can see, continue to go much lower. However, by the time the day ended, we did form a hammer, which of course is a bullish sign.
It isn't that I believe that this market is going to suddenly shoot higher, it's just that I feel the market certainly has quite a bit of support just below. The last couple weeks have been essentially sideways, and with that being the case, I don't feel that the market is particularly conducive to a sudden move quite yet. Quite frankly, the range that we have been stuck in has been tight enough for me to essentially ignore the market as far as risking any trading capital is concerned. However, I am aware the fact that some of you are short-term traders, and I feel that there is nothing on this chart that makes me believe that were going to break out of this range anytime in the next couple of days.
Possible options play.
I do think that you could sell puts below in order to take advantage of the obvious support. That might be a little bit risky in the sense that we have sold off so drastically, except for the fact that there is a ton of support on this chart below current levels. You have to go back quite a bit, but the weekly chart does show that below the $93 level, there is a lot of noise, which typically means that there is a lot of order flow to the upside down there.
We have to get above the $96 level to feel confident in going long though, so at this point in time I am more apt to stay on the sidelines, but if we get above that level I believe the market could go as high as $90.50 without too many issues. At that area, I would expect resistance, but if we can get above there, the next target would be $101 in my opinion.
