The WTI Crude Oil markets try to rally during the session on Friday, and although we did finish with a positive close, we ended up forming a shooting star as well that is based on the $102 level. Because of this, I feel that the market will more than likely try to pull back in this general vicinity as we approach a significant consolidation area.
The area just above was consolidation during the end of February, and lasted for a couple of weeks. That being the case, the fact that we formed the shooting star only solidifies the idea that the market should pull back from this area, but I think that there’s going to be a significant amount of support down near the $100 level as well. With that, I am not necessarily looking to sell this market quite yet, but would be interested in buying a supportive candle near the $100 level.
Underlying bullishness.
The market has a bit of an underlying bullish tone to it in general, even though there was a larger than anticipated build in light sweet crude inventories this past week. Nonetheless, we should eventually see the pullback as a potential momentum building exercise, as we will need to gather more traders to push through this resistance area. Ultimately, I believe that we will head towards the $105 level, but it probably will take a little bit of pushing to get to that level as there is such a significant amount of clustering just above the $102 level, extending to the $103 level.
Selling at this point time would be risky, but could be done by very short-term traders. I still think that the $100 level will bring in a lot of buyers, as it is a large, round, psychologically significant number and one would have to think that a lot of traders have been caught off guard by this move higher. I believe there’s also a “floor” in this market at the $97 level, so really isn’t until we get below there that I feel comfortable selling because it would show a “lower low” on this chart, thereby confirming a downtrend.
