The Light Sweet Crude markets rose again during the Thursday session as the commodities trade continues to go ahead. The market has recently pulled back, and it even went so much as to find support at the $105 level, an area that was once resistance. This move is classic technical analysis, and as a result we think this market is very bullish, and very healthy in that bullishness.
The $110 level will continue to offer resistance, but it should only be a blip on the radar as the trend continues higher. The recent breakout above the $105 level measured as a rectangle for a move to the $115 level, and the $115 level actually lines up as resistance based upon the charts previously. The area will more than likely be the real target for this market going forward, and as there are absolutely no real signs of abatement in the Iranian situation, the price is very believable at this point.
The $110 level was also pierced late in the session, and it looks like the market is winding up moving higher. Reports of an explosion on one of Saudi Arabia's pipelines jolted the markets late in the day. It should be said that if there ever was a time that terrorists could cause a lot of havoc, it would be now while the market is already elevated. (This report has since be denied by the Saudis.)
The market obviously is a buy only one at the moment, and as such this is the only type of trade you can be looking for now. The daily close above $110 has us long of this market, and we expect to see the level broken in short order. The $115 level would be where we look for a first target, and then the levels above would more than likely have to be based upon every $5, as the market is very technical.
The pullbacks can be bought going forward until we get below the $105 level. Until that breakdown happens - we will be long. Selling isn't a thought at that level either, and aren't considered viable until the $100 level gives way.
Oil Forecast March 2, 2012, Technical Analysis
Crude Oil Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3