The WTI Crude Oil markets had a good showing on Friday, breaking above the top of the hammer that had formed on Thursday. This is a classic buy signal in the technical analysis sense, thereby sending plenty of buyers into the marketplace at that point. The market pulled back all the way to the 105 level on Thursday, and bounced from that level in order to form a perfect hammer. That was a decent buy signal, and most certainly breaking the top of that hammer was a decent buy signal as well.
With that being the case, the market looks like it’s ready to go much higher and we should see this market going back towards the $107.50 handle, where we found significant resistance last time. I do believe that this market will break above there eventually though, and that we will see the $110 level tested for resistance as well.
No way to short this market right now.
In my estimation, there’s absolutely no way to short this market. There are plenty of reasons for this market to continue going higher, and that will be especially true as long as the situation in Iraq continues the way it has been going on. This of course threatens oil supply, which of course always brings buying pressure into the market. However, there are plenty of other things going on that could affect this market as well.
Demand is increasing a bid in places like the United States, so that of course will elevate the price as well. We are in a nice uptrend, so shorting would be a very bad idea anyway. The ascending triangle that we broke out of suggested that we were going to go as high as $113, and there’s really nothing on this chart that tells me that it’s not possible. In fact, I believe that shorter-term traders will continue to buy this market on dips, making the bearish pressure almost nonexistent. The buyers will continue to buy and buy again, and as a result I believe that anytime we dip in this market it will simply represent value.