The crude oil market exhibited signs of strength during Tuesday's trading session, hinting at the potential for another breakout.
The West Texas Intermediate (WTI) Crude Oil market has undeniably assumed a bullish stance, maintaining its upward trajectory. The market appears poised to target the $90 level, signaling a clear attempt to break free from recent consolidation patterns. A pivotal factor in this bullish scenario is the notable scarcity in supply, largely driven by the voluntary production cuts enforced by Russia and Saudi Arabia.
Furthermore, beneath the surface of this market, there exists a substantial undercurrent of buying pressure. It's reasonable to anticipate continued interest from buyers on price dips. Notably, the $85 level holds significance as a previous high and serves as the upper boundary of a larger pennant formation.
Brent markets have exhibited upward momentum during recent trading sessions, with the $90 level acting as a reliable support base. Whenever momentum has waned in the past few days, the market promptly found support at this level. A contributing factor to this optimistic outlook is the "golden cross" formation, which took shape a while ago, instilling positivity in market sentiment.
Looking Forward to the $100 Level
- While the $100 level may be within reach, it is important to temper expectations regarding the timeline for such a move.
- The market's progression towards this target will likely occur gradually.
- Over time, the market should continue to attract value-seeking investors.
Beneath the current price levels, the $85 level serves as a sturdy floor for this market. Consequently, concerns about a trend reversal should only arise if prices dip below this crucial level.
In summary, the crude oil market is poised for further gains as it maintains its bullish stance. The rally towards the $90 level for WTI Crude Oil and the $100 level for Brent appears to be a matter of when rather than if. This upbeat sentiment is supported by ongoing supply constraints and strong buying pressure. It is crucial to note that shorting this market is a cautious endeavor, barring any unforeseen shifts in the attitudes of key players such as Saudi Arabia and Russia – an occurrence unlikely to transpire in the near future. As long as the status quo persists, the path ahead appears paved with further gains for the crude oil market.
Potential signal: I am a buyer, right here, right now of US Oil (WTI). I would have a stop at the 88 level, with a target of 95.
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