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

The bulls keep scoring gains recently, yet how far to the north have they reached? Can they deal with the upcoming resistances? What is our plan should they or should they not overcome them? That's the key question of today's Alert. Now, here's the answer.

Let's take a closer look at the chart below (chart courtesy of www.stooq.com ).

Crude oil futures extended gains earlier today, having climbed above the upper border of the red gap. It suggests that we could see the bulls close this resistance. If this is the case and the bulls march higher from here, we'll likely see them test the upper border of the declining red trend channel or even Wednesday's red gap.

Nonetheless, should we see the bull's weakness in the above-mentioned areas, we'll consider reopening short positions. As always, we will keep you informed.

Summing up, oil bulls have shown up strongly today so far, and it's not our of the question to see them reach nearest resistances. In the same vein however, their weak action at these resistance areas may prompt us to reopen short positions.

Trading position (short-term; our opinion): No position is justified from the risk/reward perspective. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist