The crude oil markets were somewhat quiet most of the trading session but started to rally later on as the WTI market has reached above the $73.50 level. With that being the case, it does suggest that perhaps we have further to go to the upside and I think given enough time we are probably going to go threatening the $75 level above as it is the next large, round, psychologically significant figure. Because of this, I like the idea of buying short-term dips that offer value, in what has been a very strong uptrend until recently. We did see a nasty sell off, but it is worth noting that the fear factor about the Delta variant seems to be slowing down a bit. After all, even though the version of the coronavirus is much more contagious, it is not nearly as deadly.
When you look at the candlestick, you can see that we did close towards the top of the range, so that does suggest that we are more likely than not to continue going higher. I believe that there should be a certain amount of support near the $72 level, mainly because we formed such a large basing pattern in that general vicinity. Ultimately, I think there is a massive support barrier between the $72 level and the $70 level underneath as it is a large, round, psychologically significant figure and of course an area where we have seen the 50 day EMA approach.
To the upside, if we can clear the $75 level, then it is likely we go looking towards the highs again which is basically the $77 level. That being broken of course would be very bullish for the market and we could continue to go as high as the $80 level. I think a lot of pundits are expecting that type of move, so ultimately, I think that also comes into the picture and therefore people have to pay close attention to it. With this, markets will continue to focus very closely on the virus and outbreaks as well as perceived demand because of it. At this point, I do not really have a scenario in which I would be a seller unless of course we were to break down below the most recent low, closer to the $65 level.