(MENAFN- Daily Forex) The West Texas Intermediate market looks as if it is trying to break out during the trading session on Monday, as we are threatening the structural high from the last rally, and of course are sitting just above the 200-Day . The candlestick looks a bit like a hammer, but you can also make the argument that it could be a“hanging man”, if we break down below the bottom of it. If we do, then it's possible that we could enter the range that we had been in previously.
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Looking at this chart, you can see that we have been trying to form a little bit of a base, so I do think that oil more likely than not will continue to attract short-term pullbacks as a buying opportunity. The market has been very noisy for a while, and it will be interesting to see whether we are finally going to shoot to the upside. The market is likely to continue to see a move to the $100 level. The $100 level of course is a large, round, psychologically significant figure, and therefore I think a lot of people would be willing to take advantage of that as a potential target and a place to take profit. Looking to Buy the Dip
If we break down below the bottom of the for the trading session, that does kickoff the“hanging man pattern”, opening the possibility of a move down to the 50-Day EMA. The 50-Day EMA could offer a little bit of a support level, and if we were to break down below there, would wipe out this market. I don't necessarily think that's going to be the case, it certainly looks at this point it's likely that the crude oil market will continue to see more of a“buy on the dip” mentality.
Furthermore, you should also keep in mind that we are starting to hear that some countries are running out of crude oil, so that is a sign of things that could be coming down the road. The paper market has been completely disconnected from the physical market, so perhaps we see some type of recovery based upon that alone. There are a lot of concerns about demand, but at the same time the OPEC members have cut back production quite massively. In other words, this is going to be noisy regardless.
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