The WTI Crude Oil market fell initially during the session on Monday, testing the $104.75 level. That being the case, the market found plenty of support down below, and bounced enough to form a hammer. The hammer signifies that the buyers should come into play, thereby pushing the market higher. That would have the market consolidating yet again, and we think that a bounce from here should send this market looking for the $107 level, possibly as high as the $107.50 level without too many issues. If we can get above the $107.50 level, we feel that this market should continue to go higher, probably heading to the $110.00 level at first.
I believe that this market will continue to be bullish, and I also believe that the $105 level is by far supportive enough to continue pushing the market higher every time we test it. I feel that this market is one that you can only buy, and on top of the hammer for the session on Monday, you can actually make a little bit of an argument for a bullish flag at the moment as well. In other words, there’s far too many reasons to be long, and hardly any to be short at this point.
Headlines should continue to favor higher oil prices.
All things being equal, I don’t really see a reason why the market should pullback with any type of strength. In fact, pullbacks should be looked at as buying opportunities and potential “value.” This market simply has too many reasons to move higher, such as Iraq, the Crimea, and of course the weakening US dollar. All those should push prices higher, but on top of that I believe that there’s also the possibility that it’s a simple matter of demand rising. As demand rises, obviously the market should continue to reflect that in higher prices. In fact, it’s almost impossible to short this market until we break down below the $102 level, which would show a significant change of momentum and certainly psychology when it comes to this commodity.