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

On Monday, black gold wavered between small gains and losses, but then finished the day slightly above Friday’s closing price. What’s next for the commodity?

Crude Oil’s Technical Picture

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

Looking at the daily chart, we see that the recent upward move took crude oil to the upper blue resistance line based on the August and September highs, which suggests that we may see a reversal and decline from here in the very near future.

This scenario is also reinforced by the current position of the daily indicators (we saw such high readings before important reversal in the previous months) and the situation on the medium-term chart below.

As you see on the above chart, 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.

Summing up, crude oil climbed to the key resistances, which increase the probability of reversal in the very near future. Therefore, if we see important bearish signs (like a daily closure below the upper blue resistance line seen on the daily chart), we’ll consider opening short positions.

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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