- The crude oil market has rallied rather significantly in the early hours on Monday as the reports of the Ukrainian drone strike in Russia had people concerned about supply.
- That being said, I also recognize that we are at the bottom of the overall range at the moment.
- So, you could make an argument for just finding this as an excuse to start buying.
When I look at the crude oil market, it's not really hard to recognize that we are range bound at the moment between the $60 level on the bottom and the $65 level on the top. The 50 day EMA currently hangs around right where we are trying to close the day. So, I think we didn't really accomplish much other than getting a short term bullish move. I do favor for the short term pullbacks for buying opportunities. But you should also keep in mind that one of the biggest problems that oil has at the moment is that OPEC will not stop pouring crude oil into the markets.
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If we were to break above the $65 level, then it's likely that the market could go looking at the $70 level via the 200 day EMA. If we fall from here, the $60 level is an area that we need to pay close attention to because it is a massive support level and a large round number that a lot of options are probably focused on. If we break down below there, then the $56 level, the site of the recent double bottom could very well come into the picture and traders will watch that closely. I think we probably have more range bound trading ahead of us, and therefore, it's not a huge surprise that we are giving away some of the most extended part of the session during trading on Monday.
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