Trading position (short-term; our opinion): Short positions with a stop-loss order at $65.23 are justified from the risk/reward perspective.
The crude oil market has been declining in the previous days and weeks but yesterday we saw something quite different – crude oil ended the session higher than on the previous trading day. Is this just a pause within the decline or a major bottom?
Most likely, it’s simply a pause. In short, nothing changed based on yesterday’s price/volume action and what we wrote yesterday (please read yesterday’s alert if you haven’t had the chance to do so previously) and on the previous days, remains up-to-date (and consequently, today’s alert will be quite short).
Crude oil has indeed reversed yesterday, but the size of the move was small and there was nothing about the corresponding volume that would make us thing that the session was really significant. It seems that the final bottom for this decline is not yet in and that our profits on the short positions will become much bigger even if we see a temporary corrective upswing in the coming days.
With no changes in the outlook, we will summarize today’s alert in the same way as we’ve summarized the previous one:
Summing up,(…) the downtrend remains in place and (…) lower values of the commodity are [likely] ahead us (especially when we factor in sell signals generated by the weekly indicators and the current picture of the WTIC:UDN ratio). Even though there is a possibility of a corrective upswing in the coming days, it seems that the big profits from the current short trade are quite likely to become even bigger before the trade is over.
On an administrative note, due to travel plans there will be no regular Oil Trading Alerts on Thursday and Friday, but it doesn’t seem that it will change much as we don’t expect to see the final low being reached this week. However, if anything major happens and (!) we believe that adjustments to the current speculative positions should be made, we will send an alert anyway.
Very short-term outlook: bearish
Short-term outlook: bearish
MT outlook: mixed with bearish bias
LT outlook: mixed with bearish bias
Trading position (short-term; our opinion): Short positions with a stop-loss order at $65.23 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 Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts
