Trading position (short-term; our opinion): Short positions (with a stop-loss order at $54.15 and the initial downside target at $45.55) are justified from the risk/reward perspective.
On Monday, crude oil lost 0.55% after investors reacted to Friday’s Baker Hughes’ report, which showed that U.S. drillers added rigs for the 20th week in a row. Thank to this increase, the drilling recovery climbed to the highest level since mid-April 2015, raising worries over the supply glut. In this environment, light crude closed another day under $48. What’s next?
Today’s alert is going to be very brief, because crude oil didn’t do anything that would change the outlook on Monday and the same applies to today’s session so far. The only thing that crude oil did yesterday is that it moved slightly above Friday’s high and the previously-broken 50% Fibonacci retracement, but then reversed, cancelled all gains and finally closed 0.55% lower. Such daily reversal is a bearish sign, but the outlook was bearish anyway, so nothing really changed.
Consequently, the comments that we made on Monday 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. We will provide you with a bigger update once we see more interesting developments on the crude oil market.
Thank you.
Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager
Gold & Silver Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts
