In NYMEX trading on Monday, light sweet crude once again rose to record levels, touching $120.36 before settling at $119.97 a barrel. Confirming that the bulls are firmly in control of the market.
Crude oil sharp rise can be attributed to a microcosm of factors. First, the shorts were squeezed and forced to cover positions. Second, there were upward price pressures driven by mounting supply fears throughout the world. In Nigeria, the second largest exporter of crude to the U.S., has suffered continual violent attacks on major pipeline and flow-stations. American oil interests in Iraq were threatened by Kurdish rebels. Moreover, Iran the second largest OPEC producer refuses to withdraw from its nuclear program causing global concern. Lastly, the dollar lost some ground against other currencies.
Furthermore, In the face of record prices global demand continues to grow outpacing U.S. demand deconstruction, this coupled with the supply issues lies the fundamental basis for the market.
How to trade it…
Technically crude oil is strong buy. All short-term and long-term technical indicators point to higher prices. If Crude trades through yesterdays high of $120.36, it will test the first resistance level of $120.93 a barrel (intraday high).if it trades trough that level it will test the second resistance level of $121.60 a barrel. Where there should be some profit taking. My opinion hasn’t changed; traders should only be long this market.
Note: we are in a long-term bull market, however there are corrections (last week), but they don’t last long. Take advantage on these corrections and buy the dips
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