Trading position (short-term; our opinion): Short positions (with a stop-loss order at $48.56 and initial downside target at $35.24) are justified from the risk/reward perspective.
On Friday, crude oil bounced off session’s lows after the U.S. dollar moved slightly lower (weakened by a worse-than-expected U.S. jobs data) and the Baker Hughes' report showed that oil rigs in the U.S. dropped by 4, hitting a fresh all-time record low. Thanks to these circumstances, light crude gained 0.11%, but then closed the day under the key resistance zone. Will it encourage oil bears to act in the coming week?
Today’s alert is going to be quite short, because crude oil didn’t do anything new on Friday. It moved to the short-term black resistance line (based on the previous highs) and the red resistance zone, but there was no breakout above them. Additionally, the commodity closed the previous week under this area and also below the long-term red declining resistance line, which in combination with sell signals generated by all daily indicators suggests further deterioration in the coming week. Therefore, the comments that we made on Friday remain up-to-date also today and if you haven’t had the chance to read our last commentary, we encourage you to do so today - it’s up-to-date:
Oil Trading Alert: Another Invalidation of 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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