- Crude oil markets have been extraordinarily bullish as of late, but unfortunately, we are starting to get to the point where they are extremely overstretched, and sooner or later gravity may come into the picture.
- If that’s going to be the case, you may have a situation where it’s time to take profit fairly soon, that also brings up potential opportunity.
The West Texas Intermediate Crude Oil market has shown itself to be bullish again during the day, gapping higher on Tuesday before pulling back only to find more buyers. The problem of course is that we are getting a bit stretched, and this is something that you need to pay close attention to. Ultimately, I think you got a situation where you could see a bit of a pullback. That pullback more likely than not will offer a buying opportunity that people are more than willing to take advantage of. I do think that WTI Crude Oil eventually goes looking to the $90 level, but we may need to pull back toward the $85 level again to find enough buyers to jump into the picture.
Searching for the $92.50 Level
Brent markets also look a bit overdone, but they haven’t had much of a pullback during the day and they certainly look stronger. This does make a certain amount of sense considering that OPEC has more of a direct influence on this market. Ultimately, with OPEC cutting 1 million barrels per day off of the market this has had the desired effect of raising prices. It is almost a given that we will hit the $90 level in this market, as we are just below there right now. I do think that given enough time, we not only hit the $90 level, but probably go searching for the $92.50 level.
Both of these markets have recently seen the so-called “golden cross”, which is when the 50-Day EMA crosses above the 200-Day EMA indicator. Longer-term traders like this signal as a sign to continue hanging on to a position for a big move. Ultimately, that may be very well what continues, but regardless, you cannot be a seller of crude oil now as it has so obviously broken out. For what it is worth, both grades of crude oil also had previously formed bullish flags that are now being confirmed.
Ready to trade WTI Crude Oil FX? We’ve shortlisted the best Forex Oil trading brokers in the industry for you.