Another chart which is technically interesting is that for West Texas Oil on the weekly chart. This is another market I follow closely and in my most recent post of 9th December suggested oil prices were looking bullish following the recent OPEC meeting and looking to move to $60 per barrel and beyond. At the time oil was trading at $58.57 and since then the commodity has climbed comfortably above to trade at $60.63 per barrel as we come to the end of the year. But the question which will be uppermost for longer term investors and speculators is whether the technical resistance in place at $64 per barrel will finally be breached? This is the level denoted by the red dashed line of the accumulation and distribution indicator for NinjaTrader which delivers these levels automatically depending on how often they have been tested. The greater the number of times a level has been tested and held, the thicker the line. A good example here is the extremely strong platform of support in place below at $52.40 per barrel and denoted with the heavy blue dashed line which has provided an impenetrable wall of support throughout the year.
I certainly expect the $64 per barrel area to be tested early next year as bullish momentum continues to hold sway, particularly if we see the US dollar fall to 95 or lower on the dollar index, coupled with continued management of supply. Then it will be a question of whether any breach of this level is accompanied with good volume. If it is, we can expect to see oil prices continue higher and on to the test the next level of minor resistance at $72 per barrel.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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