Trading position (short-term; our opinion; levels for crude oil’s continuous futures contract): Full (100% of the regular position size) speculative short positions in crude oil are justified from the risk to reward point of view stop loss $45.63 at and $30.22 as the initial target price.
Under our current and previous expectations, and entirely in accord with our existing trading position, crude oil is declining. In today’s pre-market trading, the big news is that the black gold price moved below the previous September and October lows.
The crude oil price topped on October 20th and it’s been declining ever since. The move below $36 makes our trading positions more profitable, but what is interesting about this breakdown is that it indicates the beginning of a more significant lower move.
In the preceding days, crude oil declined along with the U.S. stock market, but oil is down again in today’s pre-market trading, even though S&P 500 futures are relatively flat. This underperformance of oil is extremely bearish, especially since it makes the current situation similar to what we’ve witnessed in March. Back then, crude oil also showed exceptional weakness.
To summarize, for the upcoming weeks, the outlook for crude oil stays bearish, and the most recent upswing did not change that at all. Moreover, based on the completion of the zigzag pattern, the odds are that the correction in crude oil is already over.
As always, we’ll keep you, our subscribers well informed.
Trading position (short-term; our opinion; levels for crude oil’s continuous futures contract): Full (100% of the regular position size) speculative short positions in crude oil are justified from the risk to reward point of view stop loss $45.63 at and $30.22 as the initial target price.
In the future contracts that are more distant than the current contract, we think adding the premium (the difference between the July and other contracts) to both: stop-loss and initial target prices is justified.
Thank you.
Nadia Simmons
Day Trading and Oil Trading Strategist
Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager
