In general, breaking out of this triangle suggests that we could go back to the recent highs and possibly even higher than that given enough time.
The West Texas Intermediate Crude Oil market initially pulled back on Monday but turned around to show signs of strength again. We have broken above the $110 level, and it does suggest that we are more likely than not going to see a lot of buyers coming into the market. The overall attitude of this market continues to be one that suggests we are going to continue to see demand, and it is likely that we will see a lot of upward momentum. If we turn around and pull back from here, we will find buyers sooner or later.
The bottom of the candlestick is at the $108 level, so I would look at that as a bit of a “line in the sand” that you have to pay close attention to. As long as we can stay above there, I think this is a market that has a shot at possibly finding buyers on every dip. There are a lot of concerns about global supply, and that will continue to drive prices higher as long as that is a major concern. Furthermore, we have broken out of a major technical barrier, and I think a lot of traders will be looking at that as well. The 50-day EMA underneath is sitting at the $102.75 level and rising, so I think that will be your “dynamic support.” As long as we can stay above there, then it makes sense that we will continue to see buyers coming into pick up bits and pieces of value.
The $120 level above is the target, but it is also possible that we could break out above there. If we can clear that level, then it is likely that we go looking to the $130 level. The market continues to see a lot of volatility, but that should offer plenty of opportunities if we get the occasional pullback. As far as selling is concerned, we are nowhere near a place where we can do so, so it is a “buy on the dips”, or a “buy the breakout” type of scenario that we will find ourselves in. In general, breaking out of this triangle suggests that we could go back to the recent highs and possibly even higher than that given enough time.