The WTI Crude Oil markets gapped lower at the open on Monday, and then turned around to try to break to the upside. However, we found enough resistance at the $94.00 level in order to turn things back around and form a shooting star. The shooting star of course is a negative sign, which means that the sellers still are pressuring the marketplace. However, the $92.50 level is still rather supportive from what I can see, and as a result I cannot sell this market quite yet. In fact, I think that this market is essentially “stuck.”
Ultimately, if we can break down below the $92.50 level, I feel that this market should then go looking for the $90.00 level, an area that should be more supportive. I would be willing to sell this market for the short-term on that move, fully anticipating taking profits just above the aforementioned $90.00 level.
Basing?
I have to ask whether or not this market is trying to form a bit of a base, in order to bounce and what is obviously in oversold market. By just about any metric you measure the market by, they are certainly oversold at this point in time. With that, I would anticipate at least a bounce, if not more. Besides, we are heading towards the fall season, which is when a lot of the larger firms get back into active trading. I have a hard time believing that somewhere somebody doesn’t look at this as value, simply because it wasn’t that long ago we were trading above $105.
Keep in mind that there are a couple of conflicts that can affect the oil prices out there, namely the Ukrainian and Iraqi ones. After all, anything that could threaten supply will certainly make the price of crude oil spike. There are simply far too many volatile pieces out there to the equation for me to feel comfortable selling after this massive move lower. With that though, I am being very patient and waiting for a break above the 95 points or zero dollars level in order to buy, or a supportive candle down at the $90.00 handle.
