The WTI Crude Oil markets initially fell during the session on Tuesday, testing the $103.50 level. However, we found enough support in that general area to bounce and form a nice-looking hammer. This hammer of course suggests that there is buying pressure below, and as a result the market looks like it’s trying to build up enough momentum to break out and above the top of the ascending triangle that we have been forming. The resistance of the ascending triangle is at the $105 level, and if we can get above that on a daily close I think that this market should continue to go much higher.
When measuring the ascending triangle, it appears that the market should gain roughly $8, which has me aiming for the $113 level by the time the move is all said and done. If that happens, this could be a nice buying opportunity for longer-term traders as well as short-term traders, allowing this to be a market where you “buy the dips” going forward.
Upward momentum should continue.
As far as I can tell, the upward momentum should continue going on as the market has plenty of reasons to gain. After all, there is the decline in the US dollar overall, but more importantly there is increased demand for petroleum around the world, and the headlines coming out of the Crimea that can course move oil markets in general, not just this one.
Even if we pull back from here, I would not be interested in selling, as I believe that there will be plenty of buying pressure below and it would simply represent “value.” I think that ultimately we will in fact hit the $113 level, and that could be a target by the end of the summer as far as I can tell. Pullbacks going forward should be nice buying opportunities for short-term traders, and I believe that you could essentially be a “long only” trader for the rest of the summer as summer season driving should continue to propel demand higher as well, as is typically true.
