The WTI Crude Oil markets tried to rally during the session on Monday, but found the $107.50 level to be a bit too resistive, and turned back around to form a relatively negative candle. However, there is a hammer from the Thursday session that has confirmed that the $105 level is in fact supportive. The main reason this is important is that it was once the top of a massive ascending triangle that was forming in this market. The fact that we broke above that triangle suggests that we can measure the height of that triangle for a potential longer-term target. The way I have measured this market and the triangle, suggests that we are going as high as $113 before the move is said and done.
That seems like a distance from here, but ultimately I believe that this market is bullish for several different reasons. The fighting in the country of Iraq does not help the situation by any stretch of the imagination, and there is demand picking up around the world as well.
Technically, this chart looks excellent.
The 20 day exponential moving average has been trending higher for some time, and while it is not necessarily been dynamic support and resistance, it shows just how accelerated the bullishness has become. It’s not parabolic, rather just strong. That’s exactly what I like to see, and I would not hesitate to buy this market on a supportive candle anywhere between present level and $105. In fact, I would be heavily long of this market on a supportive candle as I feel the risk to reward ratio is so strong.
I have no interest in shorting oil markets at this point in time, and I think it would take a move down below the $102 level in order to do so. I don’t see that happening anytime soon, so I actually have started to pick up binary calls over at the NADEX in order to take advantage of what I feel is a very strong trend. I believe that we will find this market going to the $113 level sometime this summer.