WTI Crude Oil Forecast: Targeting the $80 Level

Christopher Lewis

In general, the market continues to see plenty of reasons to go higher, so I think it will, given enough time.

The West Texas Intermediate Crude Oil market rallied again on Tuesday to go looking towards the $80 level. That being said, we have heard a little bit of noise just above and extending to the $80 level, so I think that the next move could be a pullback. This is not to say that you should be shorting this market, just that you might have an opportunity to pick up a little bit of value on short-term dips.

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The $75 level underneath is what I am looking at as the potential “floor in the market” currently, so I do not anticipate that this market would break below there. I think any move towards that direction will attract a lot of buyers, and I would be all over some type of supportive daily candlestick after a short-term pullback. That is the easiest trade to take when it comes to this market, because it is in such a strong uptrend.

Keep in mind that the markets are a little bit stretched in the short term, so I think all of this does make sense. Ultimately, this is a market that I think if you “choke up on the bat” in order to play shorter time frames, you can probably take advantage of an entry price in order to get profits rolling. On the other hand, if we turn around a break above the $80 level, then it is likely that we go much higher, as it is a major psychological barrier that would be broken at that point. Furthermore, one would have to assume that there are a lot of options barriers in that general vicinity, so I think breaking above the $80 level could open up another rush of money into this market.

It is not until we break down below the hammer from last Thursday that I would be a bit more concerned about the uptrend, but even then, I think the 50-day EMA comes into the picture and could offer plenty of support, which is currently sitting at the $71.40 level. In general, the market continues to see plenty of reasons to go higher, so I think it will, given enough time. That being said, you also need to realize that eventually gravity comes into the picture.

 

Christopher Lewis

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.

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