By FXEmpire.com
Light sweet crude markets initially dipped during the Wednesday session, to bounce back and form a hammer. This is formed just above the $88 level, which of course we previously had as resistance. This is classic technical analysis that we may be seen support come into the market, and as such we feel that the next move is probably higher.
The recent highs will certainly be targeted by the bullish traders as this market moves higher. The candle for the session is the standard hammer, and it does form on top of the recent breakout. This does bode well for the bullish side out there, and as such we think that the recent highs should be the least that we see on a break of the top of Wednesday’s range.
The $95 level will more than likely offer some type of resistance as it is the 50% Fibonacci retrace from the surge lower in May, because of this we could see a bit of a dogfight in the current area, and as such we think that although the market looks pretty bullish – traders will have to keep fairly tight stops as the market is so prone to headline noise.
With the things going on in the Middle East in places like Syria and Iran, there is always going to be potential for some type of headline to come along in either Spike the oil markets, or send them sinking much lower. One would have to think based upon the recent headlines out of that region that the true risks are to the upside as far as headline interferences concerned. It is with this knowledge that we are willing to consider going long of this market, even though there is dwindling industrial demand around the world.
We believe that this is a trade, and not a major investment at this point in time. We also believe that the $100 level will be the cap on this market. It is hard to imagine a situation barring some type of war in the Middle East that has this market trading steadily above the $100 level.
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Originally posted here
