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Signals Pay Out On West Texas Intermediate

News wires are highlighting Middle Eastern unrest as reasons for oil prices to move higher, along with seasonal demands for fuel. TheLFB client notes have called for consolidation at support above 95.00 on West Texas Intermediate (NYSE:WTI) and to expect a break higher in crude prices.

A tradable call to action on WTI was sent to clients recently, with a trade signal to buy the oil markets (via futures, ETF’s, or Options) when WTI broke above 102.00. The trade signal was in-line with global equity and risk markets finding buyers. The initial 103.60 target has been hit, with 105.80 as target 2.

Outlook:
Potential signals to buy WTI from 99.50 were forming on Monday, but failed to confirm that both potential and momentum would be strong enough to easily follow through. Those moves were confirmed and trade signals sent to clients on Tuesday. Clients will be notified when price action breaks towards target 2 areas on the trade signal issued on Tuesday.  

Sentiment towards WTI trade is bullish after recent tests of support held steady. Price action favored a bounce off support that bought the recent dips. Caution is required in being short the crude oil markets as TheLFB trade desk is not expecting a collapse of WTI below 95.00, or USO (the oil services exchange traded fund) below 37.50.

Price Action:
There was strong buying activity at 97.00 on WTI recently, which is a strong area of support that will now be hard to break. The next upside resistance area, where price action potentially reverses previous trade direction, is at 106.00. This area will be closely monitored and market alerts sent to subscribers as things unfold.

The daily trading range is $2.70, which is above the historical norm and indicates solid speculative interest. The 50-day Simple Moving Average (NYSE:SMA) is @ 106.00. The 20-day SMA is @ 108.30. WTI has a 36-month 75% correlation to S&P moves, and a 90% correlation to the euro (Eur/Usd).

The detail below will help guide traders with analysis on intra-day price movement, trend, and momentum. Clients will note how regularly the Swing Point and Support or Resistance areas below are used each day.

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Content taken from TheLFB Trade Plans

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