Crude Oil Price - Feb. 19, 2013

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By: DailyForex.com

The WTI contract barely budged during the session on Monday, which of course wouldn’t be a surprise as the Americans were celebrating President’s Day. As it is a Federal holiday, many financial institutions were closed, and only the electronic global trading was available. The liquidity was very thin, and as a result there could have been a sudden spike in the pricing of WTI. However, this wasn’t the case, and as a result we didn’t go anywhere during the session.

However, I currently see this market as being in consolidation, and as a result I think there is going to be a nice opportunity for short-term traders in this market. The range of the market is currently between the $95 and $98 levels, and because of this we have a nice obvious place to buy and sell. However, I am much more inclined to buy at the bottom as opposed to the top as we normally see continuation in these situations.

The uptrend has been fairly strong, and because of this I am simply not comfortable playing both sides at the moment. Because of this, I will buy near the $95 level only, and take profits at the $98 level when we approach it.

$100 a barrel

The $100 level looks like the area we are trying to get to, and as a result I think this market will eventually breakout to the upside at the $98 level. (This has a lot of bearing on why I only want to buy at this point, and won’t sell at the $98 level.) The market will more than likely break the level suddenly, as the oil markets tend to do, and as a result I do not want to be on the wrong side of a rush higher.

Oil 21913

The $100 level should be a tough nut to crack as we go higher. Because of this I think we will find a lot of sideways action in that vicinity, and at that point will have to reassess the strength of the market, and the situation that the world is in. Ultimately, the oil markets could have a strong run higher, as the Federal Reserve continue to pump liquidity into the markets.

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.