Trading position (short-term; our opinion): Short positions with a stop-loss order at $70.96 and the initial downside target at $62.85 are justified from the risk/reward perspective.

Although oil bulls tried to go higher after Tuesday’s session open, they quickly lost their strength, which resulted in a comeback below the most important short-term resistance line. Will oil bears use this show of weakness in their favor in the coming days?

Today’s alert is going to be very brief, because crude oil didn’t do anything that would change the outlook on Tuesday and the same applies to today’s session so far. The only thing that black gold did yesterday is that it moved initially higher but then reversed and cancelled all gains and finally closed the day 1.37% lower.

Such daily reversal is a bearish sign (especially when we factor in another invalidation of the tiny breakout above the upper border of the green rising trend channel, which we marked on the daily chart in our previous Oil Trading Alerts), but the outlook was bearish anyway, so nothing really changed.

Consequently, the comments that we made on Tuesday are still valid. Therefore, if you haven’t had the chance to read our yesterday’s alert, we encourage you to do so today – it’s up-to-date also today:

Crude Oil – Higher? Monthly Perspective

Trading position (short-term; our opinion): Short positions (with a stop-loss order at $70.96 and the initial downside target at $62.85) are justified from the risk/reward perspective. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

On an administrative note, due to your Editor’s travel plans for the rest of the week, the next few alerts will be shorter than the ones that we’ve been publishing recently. Of course, we will keep an eye on the market and we’ll keep posting the alerts on a daily basis, plus intraday alerts whenever the situation requires it.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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