By FX Empire.com
The Light Sweet Crude markets had an extremely bullish week over the last 5 sessions as the Middle East continues to push headlines into the bullish territory as the fears of disruption continue. The weekly candle shows that the move is closing at the top of the range, and the $105 is in the market’s sights. The level will be watched closely, and as breaking above it would have the market running up to the $115 level next. On a daily close above this level, we are willing to buy this market for a $10 run. Selling could be done on lower time frames, but the pressure simply looks far too strong at this point to think the fall would be anything other than a slight pullback.
If we get that pullback, the $95 level would be our “line in the sand” for bullishness. The level has been tested several times, but has held quite firm. The most recent action hasn’t even been able to get down to that level, so it does appear that the bulls are starting to win this battle. With this in mind, we are willing to buy on dips as long as we are above that $95 level, and would look to the daily charts for supportive candles such as hammers. The $90 level below is also very supportive, and we think that even if we break out of our consolidation area, the market simply has far too many support areas below to think that the uptrend will be over.
The market is starting to look more and more like a “buy only” market, and especially so when you are of a longer-term train of thought. The duel hammers from the two weeks previous just puts an exclamation on how strong the support is at this time, and we think that the breaking out of the $105 level is only a matter of time at this point, and are preparing to trade this market that way. We are not selling overall, especially on the longer-term charts such as this one.
Oil Forecast for the Week of February 20, 2012, Technical Analysis
Originally posted here
