Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective.
On Thursday, crude oil moved higher, reaching the barrier of $50 and the key resistance zone. Will it manage to stop oil bulls in the coming days?
Today’s alert is going to be quite short, because although crude moved little higher, the key resistance zone created by the Jun highs, the barrier of $50, the Oct 2015 peaks and the 2016 high (around $49-$51.67) continues to keep gains in check. Therefore, in our opinion, as long as there won’t be a breakout above it further rally is not likely to be seen – especially when we factor in the size of volume that accompanied yesterday’s session (it was quite tiny, which suggests that oil bulls may losing their strength) and the current position of daily indicators (the RSI approached the barrier of 70, the CCI is overbought, while the Stochastic Oscillator is very close to generating a sell signal).
Taking all the above into account we believe that the comments that we made yesterday remain up-to-date also today and if you haven’t had the chance to read our Thursday’s alert, we encourage you to do so today. We will provide you with a bigger update once we see weekly closing prices.
As always, we’ll 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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