Trading position (short-term; our opinion): Short positions (with the stop-loss order at $77.23 and the initial target at $71.27) are justified from the risk/reward perspective.

Although almost nothing changed in the price of black gold on Friday, we noticed that one more negative factor appeared. Will it encourage oil bears to fight for lower values of crude oil in the coming week?

Let’s take a look at the charts below (charts courtesy of http://stockcharts.com).

Today’s Oil Trading Alert will be extremely short, because basically nothing changed on the market since we commented on it on Friday and today’s entire alert could simply be a repeat of that issue.

During the last session of the previous week crude oil increased to $75.22 after the market’s open, but then reversed and finished the day only 1 cent above the Thursday’s closure, which clearly shows that the very short-term picture remains unchanged.

This also means that the commodity is trading below the previously-broken upper border of the green rising trend channel and the July high, suggesting further deterioration in the coming week – especially when we add the fact that the CCI joined the other two indicators and generated a sale signal.

Earlier today, we haven’t seen any important technical development, which could change the overall situation. Therefore, if you haven’t had the chance to read our Friday’s alert, we encourage you to do so today - it’s up-to-date:

Crude Oil: Weekly Reversal in the Making

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, Gold & Silver Fund Manager

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