Crude Oil has been trading around the 100 level for weeks, but someone’s betting that price is heading much higher. Here are the key levels and players to watch.
Buyers Defend 100
Crude Oil has experienced a significant rally over the past eight weeks, which has taken price to 105.20 from the 91.20 January lows, seen in the daily chart. Price recently broke beyond the 100 key level and auctioned as high as 105.20 before rejection sent price back to 100 for a retest.
Last Thursday (March 6) price dropped as low as 100.13 before OTF (other timeframe) responsive buyers stepped in and absorbed the offers, essentially returning price to 103 in a day and a half, creating a strong low in the process. Clearly, someone is betting that prices are headed much higher, as evidenced by the absorption seen in the 100.80s, making it the clear battle line to watch in the near term.
If the 100 low continues to hold, Crude could see further strength into the primary weekly upside target at 103.70, with a shot to reach the primary monthly objective at 106.44.
Failure to hold above 100 suggests a retest of the 99 key level, and puts price on a path to reach the primary and secondary monthly downside objectives at 98.91 and 96.81, respectively.
Watch 100.80 to 101.55
Crude traded in a bracketed range from 100.80 to 101.55 during Monday’s session, and absorption was seen at both extremes of the range. This range is building the energy that will lead to the next momentum move, making this range the one to watch for early directional cues. The OTF buyers are betting that 100.13 is the low, and they’re defending their trade at 100.80. If 100.80 fails to hold, those OTF buyers become sellers and will bail, which could send price through the prior micro composite VPOC (MCVPOC) at 100.12 and down into the next key level below at 99.00.
While OTF responsive buyers are defending 100.80, OTF sellers are looking to keep a lid on the 103 key level, and are defending at 101.50. Who wins? If OTF sellers fail to defend 101.50, look for price to rally back toward the current MCVPOC at 102.52, with a shot to take out 103, which then opens up much more upside above potential.