Trading position (short-term; our opinion): Short positions (with a stop-loss order at $35.63 and a price target at $25.63) are justified from the risk/reward perspective.

Today’s Oil Trading Alert will be short, as crude oil remains on track to lower levels. On Tuesday, light crude came back under the barrier of $30 once again, which means that our next downside targets from yesterday’s alert would be in play in near future. Thanks to yesterday’s drop, the commodity lost 5.14%, making our short positions more profitable. Therefore our decision from Jan 22 was a very good investment option. As a reminder:

(…) It might be tempting to wait out the current position (actually, that would have been “the easy way out” for us as it would imply no losing trade) but we think the odds are that we will be able to get back on the short side of the crude oil market at even higher prices, which will make profits from the short trade bigger than they would be if we had kept the position intact. Our focus is not and will never be on what’s “easy” - only on what’s likely to be profitable over the long run, because we care way more about your profits and portfolios than about “never being wrong” or “never taking a loss”.

Please note that this small trade is just a small correction in profits that we have been generating to you in the past weeks and months. In fact, if you examine the second trade that is described on the above page, you’ll see that we’ve done a similar thing (exiting a trade at a small loss in order to increase the overall profitability) in the past and it was well worth it.

Finishing today’s alert, please note that earlier today we haven’t seen any important breakout/breakdown, which could change the overall situation. Therefore, if you haven’t had the chance to read our yesterday’s alert, we encourage you to do so today - it’s up-to-date:

Oil Trading Alert: Invalidation of Earlier Breakouts

As always, we’ll keep you - our subscribers - informed should anything change.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief

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