The WTI Crude Oil markets fell during the course of the day on Tuesday, ultimately testing the $97.00 level for support yet again. We found the area supportive enough to form a hammer though, and as a result I think that a bounce is probably coming. This market should continue to see a lot of volatility regardless, and as a result I think that it will take a certain amount of wherewithal to hang onto a trade, but for those who can hang onto it, I think this market should go as high as $100 without too many issues.
The market breaking below the $97 level would be a negative sign, and if we get a daily close below there, I think that the market will try to test the $95 level at the least, and because of this I think that the selling pressure will continue to strengthen. The sellers will feel emboldened at that point, and a serious attempt to get down to the $90 may occur.
A bounce would be a nice opportunity though…
The area we are at would be an excellent buying opportunity in my opinion, and as a result I am also willing to risk it as the risk to reward ratio is more than enough for the risk. With this, I think a lot of traders will be interested in buying oil as it should represent a bit of a value at that point.
I think we could go as high as $104 given enough time, but certainly $100 will be where the first bit of selling pressure should return to the marketplace. If we get above the $100 level, the $104 level within be where the sellers would try to reassert control, and if we get above there, we could go as high as $107, although I think that’s probably unlikely in the short term as the summer time trading and lack of volatility that comes with it should dampen that type of move. After all, August is one of the more popular months for large money traders to take holidays.