WTI Crude Oil
The WTI Crude Oil market initially pulled back a bit during the day on Tuesday but rallied to break above the top of the shooting star from the previous session. I believe that the market will continue to grind to the upside based upon this, but I think the keyword is going to be “grind.” The 50 day simple moving average is above at the $68 level, and that should be the next resistance barrier. Pullbacks at this point should continue to be thought of as value, and unless we break down below the $65 level, which would be a breach of the uptrend line that we have been dealing with lately. There seems to be a lot of noise in this market, but it does look like if you are cautious enough and probably more importantly, patient enough, you should profit to the upside.
Natural Gas
The natural gas markets initially fell during the trading session on Wednesday, reaching down to the $2.90 level. However, we turned around to break towards a $2.96 level again, an area that has been resistance as of late. If we can break above the $2.96 level, then we will probably go looking towards the $3.00 level. That’s an area that is psychologically important, but I think there is even more structural resistance at the $3.10 level. If we do turnaround from here, it’s likely that the market will break down to the $2.90 level, and then possibly the $2.85 level. It’s difficult to discern anything beyond a short-term trade though, so keep that in mind. I would pay attention to the hourly chart, using these levels as parameters from which to trade. Right now, I suspect that we will see a lot of back-and-forth action with those resistance barriers above.
