Trading position (short-term; our opinion): Long positions (with a stop-loss order at $41.39 and initial upside target at $49.53) are currently justified from the risk/reward perspective.

On Monday, crude oil gained 4.06% as growing expectations that major oil producers will reach a deal to cut output supported the price. Thanks to these circumstances, light crude broke above the last week’s high and the 50-day moving average. Will these positive technical events trigger further rally?

Today’s Oil Trading Alert will be short, as basically nothing changed on the market since we commented on it yesterday and today’s entire alert could simply be a repeat of yesterday’s issue. As we mentioned earlier, crude oil extended gains and increased to an intraday high of $48.51. With this move the commodity broke above the last week’s high and the 50-day moving average, reaching the 61.8% Fibonacci retracement (based on the Oct-Nov decline). Although this resistance level could trigger a pullback, crude oil futures moved higher and climbed to $49 earlier today, which suggests that another attempt to move higher after the market’s open is very likely – especially when we factor in yesterday’s breakouts and buy signals generated by the daily indicators. Therefore, if you haven’t had the chance to read yesterday’s alert, we encourage you to do so today - it’s up-to-date:

Oil Trading Alert: Crude Oil – Will We See Rally to $50?

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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