Trading position (short-term; our opinion): Short positions (with a stop-loss order at $56.45 and an initial downside target at $45.81) are justified from the risk/reward perspective.
Although the black gold moved sharply lower after the U.S. Energy Information Administration showed another increase in crude oil inventories, the commodity pulled back in the following hours, closing the day above $48. But did this increase change anything in the technical picture of light crude?
Today’s alert is going to be very brief, because crude oil didn’t do anything new. It slipped slightly below the last week’s low, but then rebounded invalidating this tiny breakdown. Although this is a positive event, we should keep in mind that the sell signals generated by the weekly indicators and the daily Stochastic Oscillator are in play, supporting oil bears and lower prices.
Consequently, the comments that we made yesterday remain up-to-date also today and if you haven’t had the chance to read our yesterday’s alert, we encourage you to do so today.
Thank you.
Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager
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