The overall attitude of the market has been one that has gone higher, despite the fact that it is not necessarily a clean market right now
The West Texas Intermediate Crude Oil market has rallied quite nicely during the trading session on Friday as we continue to bang around in a major symmetrical triangle. You can see that I have clearly drawn this on the chart, and the uptrend line continues to offer a bit of resistance. It is worth noting that we are close to the highs from a couple of weeks ago, and at this point, if we were to break above the $111 level, it is likely that the market will continue to go higher.
In that scenario, the market would probably go looking to reach the $115 level, possibly even the $120 level. The market pulling back also makes just as much sense, because of the resistance that we have seen tested multiple times. If we were to pull back, that does not necessarily mean that is time to start selling oil, just that we may have to go looking for value yet again. The 50 Day EMA would be an area that you need to pay close attention to as it has been dynamically supportive more than once.
After that, there is an uptrend line underneath that comes into the picture as well, that is the bottom of the symmetrical triangle. At this point, the market continues to be very choppy, so you need to be cautious with your position size. However, it is probably worth noting that the overall attitude of the market has been one that has gone higher, despite the fact that it is not necessarily a clean market right now as far as a direction or trend is concerned. Notice that the 50 Day EMA continues to rise as well, and when you look at this chart, this is a perfect example of how people typically use moving averages, as it shows a slight “lean to the upside.”
If we were to break down below the uptrend line, which is essentially the $100 level, it is possible that the WTI Crude Oil market goes looking to reach the 200 Day EMA underneath. That would be somewhere near the $90 level, which is of course a psychologically important level, but it is also an area where we had seen a lot of noise back in February. Because of this, it does make a certain amount of sense that we revisit that area, but only if we get a sudden shock to the system. As things stand right now, it looks like it is much easier to go higher.