Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective.
On Friday, crude oil gained 0.61% and climbed temporary above $51 as declines in distillates and gasoline inventories encouraged some oil bulls to act. But did this increase change anything in the technical picture of the commodity?
Let’s examine the daily chart and find out (charts courtesy of http://stockcharts.com).
As you see on the charts, although crude oil moved little higher on Friday, the overall situation in the medium-, short- and even in the very short term hasn’t changed much as the commodity is still trading in the blue consolidation in the red (key) resistance zone.
However, sell signals generated by the CCI and Stochastic Oscillator remain in place, supporting oil bears and lower values of light crude. Nevertheless, in our oinion, as long as there won’t be breakdown (and a daily closure) below the barrier of $50, another bigger move to the downside is not likely to be seen and short-lived moves in both directions is the most likely scenario.
We will provide you with a bigger update once we see more interesting developments on the crude oil market. 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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