The WTI Crude Oil markets were closed for the Memorial Day holiday on Monday, but as you can see the markets have recently started forming what looks to be in ascending triangle based around the resistance area at $105. With that, I feel that this market will continue to go higher and it’s only a matter of time before we breakout to the upside. After all, the Friday session was in fact a hammer, which of course shows underlying strength anyways. I believe that if we get a daily close above the $105 level there’s not much to stop this market from going to the $110 level and beyond. In fact, if you measure the potential ascending triangle, it actually projects a move to the $113 level, which in my opinion is very valid although it may take some time to get there.
Oil looks to breakout everywhere, headlines could push it.
Don’t forget that there are a lot of potential headlines out there that could push oil markets higher, with the Crimean situation being the most obvious one. However, I feel that this market is going to go higher because of underlying fundamentals as well, as it appears that demand is picking up a bit and places like the United States. This is the summer driving season in North America and Europe, so that of course puts a little bit more demand on oil anyway, so while we don’t often see massive moves in the summertime, we do generally see some buoyancy in the markets.
Pullbacks at this point time should continue to be buying opportunities and I believe that the $103 level is probably going to be about as far as the sellers will be able to push this market to the downside. With that, I believe that any pullback at this point in time will be met with intense buying, and the gap that is sitting at the $103 level should be the “line in the sand” if you will. Going forward, I expect good things out of this market for the buyers.
