For most of us, crude oil price soaring higher is definitely unfavorable as gas price and public transportation cost will most likely rise as well and this could hurt our pockets on a daily basis but for some traders, this could be a good opportunity to make some moolah.
Chart-wise, WTI crude oil (For those who do not know, WTI means West Texas Intermediate and is a benchmark in oil pricing) was moving within an ascending channel for almost a year until it broke out last February. After which it started consolidating to what could be an ascending triangle or a cup and handle pattern. It really doesn’t matter which among these 2 patterns the crude oil chart is consolidating into since both have the same characteristic, when it breaks out, it goes up. So if the $106.94 resistance gets cleared out then we can see an upside target of $115.00. That’s almost 10%. I know this sucks but this is what my technical analysis is telling me, I hope I’m wrong… On the downside, $100.00 is a strong level of support technically and psychologically. If this hurdle gets taken out, the next support could be 95.00 US dollar.
Like what my colleague mentioned on his WTI crude oil post last week, “On the fundamental/political side, the tension in Libya has been pushing the prices of oil higher. With the US, France, UK and other countries teaming up in bombing Muammar Gaddafi’s forces and the later still not giving up, risk aversion could remain. Until peace in Libya is restored and a new government is formed, the price of oil could continue to rise”.