WTI Crude Oil Forecast: Showing Signs of Life

The West Texas Intermediate Crude market has initially fallen on Tuesday but then turned around to show signs of life again. By doing so, it looks as if the market is going to continue to go higher, and eventually smashed through the $120 level. The $120 level is an area that is psychologically significant and an area that will attract a lot of attention. Underneath, the $115 level is an area where we had broken out of resistance from previously, and therefore it should offer a bit of a “floor the market.”

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The crude oil markets will continue to see a lot of noise due to the situation in Ukraine, and all of the Russian oil that is being diverted off of the world’s markets. Ultimately, I think this is a situation where we have noisy behavior more than anything else, but with an upward tilt. I like the idea of buying pullbacks to take advantage of value, as it will more likely than not continue to see plenty of value hunters coming back in. After all, oil has been one of the better performers most of the year, and I just don’t see that changing anytime soon.

If we were to break down below the $115 level, then it’s possible that we could see a more significant pullback, perhaps even going all the way down to the $110 level where the 50 Day EMA is approaching. I have no interest whatsoever in trying to sort this market, at least not until we break down through there at the very least. If we break down through there, then it’s possible that we could go to the $110 level. That’s an area that is going to be interesting to pay close attention to but at this point I think with everything that’s going on, it’s difficult to imagine that this market sells off with any type of momentum or permanence. I think than the oil market continues to be one of the better trades for the summer, and therefore I think we not only reach the $130 level above, but we are going to go much higher than that given enough time. This will be true based upon the “measurement” of the triangle as well. With demand and all of the technical factors, this looks very bullish to me.