The West Texas Intermediate Crude Oil market initially tried to rally during the trading session on Thursday but gave back quite a bit of the gains to in the day essentially unchanged. That being said, the market is still very bullish and therefore you need to look at it through the prism of being bullish and strong. With this being the case, the market is one that I am going to be very hesitant to jump “all in” right away, but I think pullbacks should offer plenty of buying opportunities as we are in a strong uptrend.
I think the $85 level would be an area that has been resistance previously, and therefore it is likely that we are going to see that as potential support. Even if we do break below there, the market very likely will find plenty of support at the $82.50 level as well, an area that had previously been support. After that, then the $80 level comes into the picture where the 50 day EMA is starting to reach towards that level as well.
All things been equal, this is a market that I think continues to see plenty of upward momentum, based upon the idea of OPEC struggling to fulfill its quotas, and of course the fact that we have a major reopening trade going on. Because of this, it is probably a situation where we will see a lot of dip buyers going forward, but that does not necessarily mean that you can be reckless. After all, we have a lot of concerns out there when it comes to financial markets and of course the Federal Reserve tightening. This has put a bit of a turbocharge into the US dollar, which of course the contract itself is priced in.
If we do break above the top of the candlestick for the trading session on Thursday, the market will almost certainly break above the $90 level and go much higher. I do not have a scenario in which a willing to short this market, as we have seen so much bullish pressure and of course should continue to see plenty of people willing to jump on board. Ultimately, it is very likely that we will see this market go looking towards the $100 level before it is all said and done.