At this juncture, I believe that it is easier to buy the dips than it is to sell the rips.
The West Texas Intermediate Crude Oil market initially fell during the trading session on Thursday to reach the crucial 50 Day EMA. This is an indicator that begins significant support all the way down to the bottom of the channel that I have clearly marked on the chart. The fact that we have pulled back to that area and balanced is a good sign, and it does suggest that we are probably going to continue to see buyers take advantage of value as it occurs. Ultimately, I think this is a market that tries to get back to the top of the channel, which is closer to the $115 level.
It is worth noting that the candlestick does look a lot like a hammer, and it does suggest that we are going to continue to see a lot of buyers on dips. That has been the case for a while, even though the market has been rather choppy. It is worth noting that there are concerns about demand, but that being said it is likely that we are going to continue to see more concern about the lack of supply. With that being the case, we will continue to see a lot of noisy behavior. However, one of the easiest ways to trade this market is to simply pay attention to the price.
It is difficult to imagine seeing anything other than an up-trending channel at the moment, and the price has been pulling back only to find buyers yet again. There is no reason to think that it is going to change anytime soon, and therefore I think it is likely that we will continue to see more of a grind higher. The market will continue to be noisy, but at the end of the day, it is a market that is trying to find its way to the $120 level.
However, if we were to turn around a breakdown, it is not until we get below the $100 level that I become concerned with the uptrend. At that point, it is possible that we could see a significant breakdown in price, but it will take a significant amount of selling pressure to make that happen. At this juncture, I believe that it is easier to buy the dips than it is to sell the rips.