Trading position (short-term; our opinion): Short positions (with a stop-loss order at $54.21 and initial downside target at $43.37) are justified from the risk/reward perspective.

On Monday, crude oil extended losses as long-term worries over global oversupply continued to weigh on the price of the commodity. In this environment, light crude lost 1.26% and closed the third day in a row under the short-term support zone. What’s next?

Today’s alert is going to be very brief, because crude oil didn’t do anything that would change the outlook on Monday and the same applies to today’s session so far. The only thing that crude oil did yesterday is that the commodity moved initially higher, but then reversed and cancelled all gains and finally closed the day 1.26% lower. Such daily reversal looks like a verification of a breakdown under the green zone, which is a bearish sign that suggests lower prices of light crude in the coming day(s). Therefore, all comments that we made yesterday remain up-to-date also today and if you haven’t had the chance to read our Monday‘s alert, we encourage you to do so today:

Oil Trading Alert: Crude Oil under Important Support Zone #2

Finishing today’s alert we would also like to draw your attention to our yesterday’s article about the relationship between crude oil, gold and silver:

Crude Oil – Precious Metals Link

Have a nice read.

On an administrative note, due to my travel plans, there will be no Oil Trading Alerts on Thursday and Friday (the next Oil Trading Alert is scheduled for Monday, Jul 18). Nevertheless, if the situation changes significantly, we will send you a quick note with our latest analysis and thoughts on that matter.

Thank you.

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

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