Crude Oil – Daily outlook 02 November 1, 2011
Since early October we’ve seen the bulls out in force pushing the price of oil higher and higher. Early last week we saw the market closing above the important technical level of 90, with the rest of the week seeing fairly flat and range bound conditions.
Monday saw a completion of a Hikkake pattern with the market falling lower in early trading, later reversing and closing higher. The Hikkake comes at a strong S&R level of 90 further confirming more bullish momentum could be on the horizon.
Below we can see the strength and importance of the 90 level as it has held as strong Support and resistance in the past. The next area we may see the market struggle to push through is 95; however should we see the market breaking and closing above this area it would not be unlikely to see 100 again.
Below we can see the Hikkake pattern in more detail. The Hikkake should be given more attention due to the fact it has formed at an important level in the market. It’s also important to take note of the double inside bars which further strengthen this bullish signal.
There are a couple of ways in which we can take this trade. One idea may be to wait for the market to fall placing a buy limit at the 90 area. Another idea may be to wait for the market to push higher and buying when we see a break of the outside bar.
