Trading position (short-term; our opinion): Long positions (stop loss at $37.23; initial upside target at $46.90) are justified from the risk/reward perspective.
On Friday, crude oil gained 2.30% as Thursday’s Saudi Arabia energy minister’s comments continued to weigh on investors‘ sentiment. In this environment, light crude invalidated earlier breakdown under a support zone and closed the day above $44. How high could the commodity go in the coming week?
Today’s Oil Trading Alert is going to be very brief, because crude oil extended gains once again and remains on its way to our upside target. At the end of the previous week, the commodity climbed above $43, invalidating earlier breakdown under the support zone created by the late-Apr and May lows. This positive event in combination with buy signals generated by the indicators encouraged oil bulls to act, which resulted in a weekly closure above $44. Taking the above into account, we believe that the comments that we made on Friday remain up-to-date also today (especially when we factor in the fact that crude oil futures are trading above Friday’s levels at the moment of writing these words) and if you haven’t had the chance to read our previous alert, we encourage you to do so today.
Thank you.
Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief
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