More importantly, that hammer sits just above the $90 level, it appears that we have come back to retest the $88 level, and proven it to be supportive. The shape of the candle for the week is certainly supportive as well, and it is because of this that we feel this market will be a buy once we manage to break above the highs from the previous week before the hammer was formed. This would show us clearing all resistance at about the $92.50 level, and suggested more momentum was picking up for the bullish traders.
With this in mind, we cannot sell the oil markets at this point in time as theirs is simply far too much support all the way down to the $84 level. We feel that the $100 level will be massively resistive, and as such we think that a shorter-term trade based upon the larger time frames could be had at this point in time, but to think that it is a buy-and-hold at this point in time is probably being a little bit unrealistic. There is simply not enough demand from an industrial standpoint to prices that are elevated much higher than they are now.
Looking forward, we think that we will remain in this “super cluster” that stretches from the $80 level on the downside, all the way up to the $110 level on the upside. We think in order to hit the top of this area however that the Middle East will have to flare up as far as tensions are concerned which of course is always possible. (source http://www.fxempire.com )
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