WTI Crude Oil Forecast: Touches the 50-Day EMA

• The West Texas Intermediate Crude Oil market rallied a bit during the trading session on Thursday, touching the 50-Day EMA.
• The market looks rather healthy in the short term, but we still have to worry about the overall attitude of traders. After all, one of the biggest problems that crude oil faces right now is that there could be a serious demand issue.
• Because of that, I would be very hesitant to buy this market, at least until we clear all this noise.

That noise, I believe shows itself in the form of the 50-Day EMA, the $80 level, and then the $81 level. If we can get through all of that, then it’s possible that the WTI Crude Oil market can go much higher. In fact, you could even start to talk about an inverted head and shoulders at that point, sending this market much higher. Whether or not that kicks off is a completely different question but at this point, I think it’s at least something worth paying attention to.

I am Hesitant to Buy

As traders continue to worry about global demand, that obviously puts a bit of a wait around the neck of the oil market. Because of this, I am looking for signs of exhaustion to start selling, with the idea of heading back down to the $75 level. One thing that is starting to boost the idea of oil going higher of course is China reopening trade, but at this point, it’s probably just a little bit aggressive to think that that is suddenly going to be a major factor. After all, China has a lot of its own issues right now, so I’m a bit hesitant to think that everything’s going to change in one fell swoop.

The other possibility would be that the market simply grinds back and forth in this overall area, which does make a certain amount of sense because regardless of what side of the aisle you said, you must recognize that the markets do consolidate quite a bit, especially the oil market. Trading between $75 and $80 certainly would fall within the realm of normalcy when it comes to the crude oil market. At this point, I am hesitant to buy, but I am much more aggressive on signs of exhaustion to start selling.