The WTI Crude Oil markets tried to rally after gapping higher on Wednesday, but as you can see gave back most of the gains by the end of the session. The result of this of course was that the market formed a shooting star, which of course is a very negative sign. That being said, I don’t necessarily anticipate that this is going to be a massive selloff anytime soon, rather that it could be a pullback in order to breakout to the upside, something that we need to do. After all, it is going to take a significant amount of momentum to see that the $102 level is completely broken, and that we could go to the $104 level.
The shape of the candle suggests that this short term pullback could send this market as low as $100, but ultimately I believe a supportive candle between here and there is a buying opportunity. On top of that though, a break above the top of the shooting star could be a decent buying opportunity as we should then reach the $104 level first, and then ultimately the $105 level which I see as massive resistance.
“Buy on the dips.”
I believe that the best way to approach this market will be to buy on the dips, based upon short-term charts but not forgetting that the longer-term charts lead the way. We have obvious support and resistance areas between here and the $105 level, so expect choppy conditions. However, if you look at the overall attitude of the market, you can see that we have been grinding our way a bit higher. In fact, it could possibly be that we are forming some type of ascending triangle, which of course would be bullish as well.
I see no real way to short this market, at least until we get below the $99 level, and quite frankly probably the $97 level is the real gateway to lower pricing. However, I have to admit that I highly doubt we are going to see $97 anytime soon.
