The WTI Crude Oil markets fell during most of the session after initially gapping higher on Thursday. The market bounced off of the $105 level, which of course was the site of a massive breakout from the ascending triangle, and with that I feel that the market bouncing from here and forming a hammer suggests that we will continue to go higher. A break of the top of the hammer is a classic buy signal, and it certainly goes with the overall trend.
I am very bullish of the petroleum markets in general right now, and this hammer only solidifies that attitude. The move above the top of the hammer should send this market looking for the highs again, and then ultimately the $110 level, a target of mine for some time now. I feel that this market can only be bought, and short-term traders will continue to come into play in order to push the markets higher and higher given enough time.
Several different factors pushing this market higher.
There is of course demand coming out of the United States, the chief consumer of this particular grade of petroleum. However, there are also “knock on” effects from the current crisis in Iraq, which sees fighting at a refinery currently. That being the case, I find it difficult to imagine that some headline is going to cross the wires to push oil prices down. Quite the opposite, I think that the market can only go higher from here, and should probably aim for the $110 level given enough time. I think that short-term traders will enter time and time again, and that the headlines will continue to dominate what happens in the market. Nonetheless, we are heading towards the summer months, when volume typically falls off. A lot of times the markets tend to drift during that time period, and as a result I believe that several buying opportunities will present themselves. If you are a short-term trader, you’re going to love this market as you simply buy and click your profits over and over again.