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

On Friday, crude oil moved sharply higher and broke above April high. Will we see further improvement in the coming week?

Crude Oil’s Technical Picture

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

On Friday, crude oil moved sharply higher and closed the previous week above the long-term green line, which suggests a test of the 2017 highs in the coming days. The pro bullish scenario is also reinforced by the size of volume, which increased during recent weeks, suggesting that buyers are getting stronger.

However, on the other hand, black gold remains in the yellow resistance zone, which stopped oil bulls several times in the previous months. Additionally, the RSI, the CCI and the Stochastic Oscillator climbed to the levels seen at the beginning of the year, which suggests that another reversal may be just around the corner.

Therefore, in our opinion, as long as there is no breakout above the yellow resistance zone or strong bearish developments (for example, invalidation of the breakout above August high) no positions are justified from the risk/reward perspective.

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

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