By FXEmpire.com
The Light Sweet Crude markets rose on Monday as the commodity continues to push forward. The bulls certainly have been in charge over the last few weeks, and this looks like it could be a move to continue.
The Iranians are still being very defiant with their nuclear program, thumbing their nose that the rest of the world. There are still threats of closing the Strait of Hormuz, which would almost certainly bring the US Navy into the fold, and the Strait won’t be closed for long. However, there is always concern of a supply disruption, no matter how short-lived it would be, and this will always push prices higher.
The summer driving months are coming up for those in the United States, so in theory the average consumption of Americans for the next several months should increase as well. This should continue to support prices going forward for the foreseeable future as the demand part of the equation expands.
The breaking higher of the market on Monday shows that we have cleared the top of a recent bull flag that has been on our radar for some time now. The flag looks as if the market is going to start another leg higher at this point, and the pole of it measures for a move up to the $122 level. Because of this, we are long at this point and now looking to add to the position as the resistance levels give way.
Going forward, we expect $110 to offer a bit of a challenge. However, as the trend is higher and higher – we think this will only be a temporary slowing at best. The market looks like it will run to $115 as well, and then to our target. While the trade will undulate, the direction should continue to be higher overall. Also, there will be headline risks involved in trading this market, but the odds must certainly favor risks to the upside for this market at this point. We aren’t selling at this point under any circumstances until we close well below the $95 level.
Oil Forecast March 20, 2012, Technical Analysis
Originally posted here
