The WTI Crude Oil markets initially fell during the session on Monday, but as you can see found support at the $99 handle in order to bounce and form a hammer. The hammer at the top of the surge higher suggests to me that perhaps the market still has plenty of momentum to the upside, and that we will in fact breakout higher soon. With that, I am more and more inclined to believe that the breakouts going to come sooner rather than later, and as a result I believe that the move above the $101 level will fire off a lot of buy orders soon.
Any pullback at this point in time is more than likely going to be a buying opportunity, and quite frankly I believe that the short-term charts might be the way to go if you’re looking for value on the entry. I have no interest in selling this market at the moment, and don’t really think it’s possible until we get way below the $95 handle.
Momentum suggests higher prices.
Without worrying too much about the fundamental reasons for the price of oil going higher, one can simply look at the chart in understand that the momentum is with the buyers. Because of this, there really is no question as to what direction you should be trading this market, and quite frankly I would not be surprised at all to see it make a run towards the $110 level again, given enough time of course. It won’t be a move straight higher obviously, and there are clusters here and there that will keep the market down at times. However, when the market pulls back, even after the breakout, I think that it will attract value investors as oil has been beat up so viciously over the last several months.
Watch the value of the US dollar, as it can have an effect on this market from time to time. Nonetheless, I believe that the oil markets are already telling us that selling is a good way to lose money going forward.