Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective.

Although crude oil increased after the market’s open, oil bulls didn’t manage to hold gained levels, which resulted in a pullback and invalidation of the earlier breakout. Will this negative event encourage oil bears to act?

Crude Oil’s Technical Picture

Let’s take a closer look at the charts and find out (charts courtesy of http://stockcharts.com).

Looking at the daily chart, we see that although crude oil extended gains and hit an intraday high of $47.74, oil bulls didn’t manage to push the commodity higher, which resulted in a pullback. Thanks to this decline, light crude slipped under the previously-broken 50% Fibonacci retracement and the early July high of $47.32, invalidating the earlier breakouts.

What Does It Mean for Crude Oil?

In our opinion, such price action is a bearish development, which suggests further deterioration. Nevertheless, another bigger move to the downside will be more likely and reliable if the black gold closes today’s session below the 50-day moving average. If we see such price action, we’ll consider opening short positions. As always, we’ll keep you - our subscribers - informed should anything change.

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed with bearish bias
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective. We will 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

Gold & Silver Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts