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

On Friday, oil bears pushed the black gold lower, which resulted in a breakdown under the short-term support. Will we see further deterioration in the coming week?

Crude Oil’s Technical Picture

Let’s take a closer look at the charts and find out (charts courtesy of http://stockcharts.com).

Looking at the daily chart, we see that crude oil extended losses and closed Friday’s session under the previously-broken lower border of the red declining trend channel. In this way light crude invalidated the earlier breakout, which is a bearish development.

Additionally, the CCI and the Stochastic Oscillator generated the sell signals, which suggest further deterioration in the coming week. Therefore, closing long positions and taking profits off the table is justified from the risk/reward perspective.

What’s next for Light Crude?

Taking the above-mentioned factors into account, it seems to us that the black gold will extend losses and test the green support zone (or even the recent lows) in the coming days. Nevertheless, a short-lived upward move to the lower border of the red declining trend channel before the decline can’t be ruled out.

Very short-term outlook: mixed
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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