Trading position (short-term; our opinion): Small (half of the regular size) short positions (with a stop-loss order at $61.13 and the initial downside target at $52) are justified from the risk/reward perspective.

On Friday, black gold increased slightly and closed the previous week above $57. But did the size of volume confirm oil bulls’ strength?

Let’s examine the technical picture of crude oil (charts courtesy of http://stockcharts.com).

Crude Oil’s Technical Picture

Today’s Oil Trading Alert will be quite 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.

As you see on the daily chart, although crude oil increased slightly on Friday, the overall situation in the short term hasn’t changed much as the commodity remains under the upper border of the black rising trend channel and the upper line of the blue declining trend channel. Additionally, the size of volume, which accompanied Friday’s move was tiny (compared to what we saw a day earlier), which doesn’t confirm oil bulls’ strength and suggests that lower prices are just around the corner.

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

Who Knows What Will Black Gold Do in Coming Week?

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

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