Trading position (short-term; our opinion): Short positions (with a stop-loss order at $52.52 and the initial downside target at $45.80) are justified from the risk/reward perspective.

On Monday, the black gold moved a bit lower after news about a recovery in production from Libya's largest oil field. In this environment, light crude lost 0.38% and slipped under the 200-day moving average once again. Where will the commodity head next?

Today’s alert is going to be quite short, 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 it moved initially lower and closed the day under the previously-broken200-day moving average, invalidating the earlier breakout. Such price action is a bearish sign, but the outlook was bearish anyway, so nothing really changed.

Consequently, the comments that we made on Monday remain up-to-date also today and if you haven’t had the chance to read our yesterday’s alert, we encourage you to do so today.

Thank you.

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

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