Target Levels: Heating Oil
When a market is on the move, it often gravitates towards specific target levels. Sometimes these levels are weak and only temporarily slows the market’s primary direction higher or lower. At other times, these levels are strong and will stop the market in its tracks, sending it back in the opposite direction. In either case, these levels need to be monitored as they represent opportunities to enter new positions or exit old positions.
How Targets Work
Our targets are built on past key support and resistance (S/R) levels that are brought together in a weighted strength average. Specifically, we rate past S/R levels based on their ability to hold the market at set price levels. The longer these levels hold, the greater their strength. Next, we look for a confluence of S/R levels in the same area. The more these levels are closely related, the higher the count level. Price levels with high strength and count levels translate into strong targets that require close attention.
The target chart organizes upside and downside target levels based on historic confluence points. Targets are updated in one-half ATR increments from the previous day’s close within a maximum of +/- 3 ATRs.
- Strength = The number of key bar intervals to hold the market.
- Count = The number of previous key levels in the same area.
- Price = A weighted average of past S/R levels based on strength.
Heating Oil Price Targets with Strength & Count