The West Texas Intermediate Crude Oil market continues to show support just below current levels, as we had formed a nice hammer during the trading session on Wednesday that sits right on top of an uptrend line that of course is massive support and of course very important. Because of this, the market is likely to continue to see buyers underneath that will try to push this market to the upside.
The $70 level above of course offers a certain amount of psychological resistance, and of course the $70 level also has attracted the 50 day EMA which would cause quite a bit of resistance. Breaking above that level then opens up a move towards the $74 level, where we had previously seen selling pressure. All things been equal, this is a market that continues to be very choppy, and it looks as if we are trying to form some type of symmetrical triangle, unless of course we turn around a break down below the support level at the $65 level. Speaking of the $65 level, it is where we had bounced from previously, as the market had not only shown support, but it also formed a bit of a “double bottom.”
If we were to break down below there, then it opens up the possibility of the market going down towards the 200 day EMA which is sitting at the $61.28 level. All things being equal, I believe that the market is probably going to continue to see a lot of questions asked about the reopening trade, as the Delta variant concerns continue to weigh upon the market in general. That is not to say that I think we are suddenly going to enter a bear market, just that the market may not be a shot straight up in the air as it had been in the past. In general, I think you need to be cautious about your trading size, but once we get a little bit of an impulsive candlestick, we can start to follow it as it could give us a little bit of clarity that we so desperately need in this market. With this, I think you are probably looking at a scenario where you are looking more or less a range bound and noisy environment.
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