WTI Crude Oil
WTI Crude Oil traders initially rallied during the day on Monday, trying to pick up what should have been value. However, the previous uptrend line has offered resistance, something that technical traders will be very interested in. By forming a shooting star looking candle for the day, it looks as if rallies will continue to be sold, and I think that we will probably go looking towards $58, and then eventually the $56 level underneath. It’s not until we break above the $62 level that I would consider buying. It would not only break above the top of the previous uptrend line, but break the top of a shooting star, which would be very bullish. There are plenty of reasons to think that supply is going to continue to pick up, as Americans have been flooding the markets with these higher-level pricing. I believe that oversupply is going to remain an issue.
Natural Gas
The natural gas markets fell again and have shown no proclivity to rally. At this point, it is overly bearish, and although I think it’s oversold, you certainly cannot start stepping in to try to catch a falling knife. I think the $2.50 level will attract a lot of support and buying pressure, and I also think that it’s only a matter of time before we get a strong rally anyway. That will more than likely be best opportunity you get in the short term, giving an opportunity to short this market higher levels. I anticipate that the $3.00 level will offer significant resistance, and I think that some type of exhaustive candle in that area would be a wonderful opportunity. If we break down below the $2.50 level, the market should drop even further. However, because we are so overdone I think patience will be needed more than anything else.
