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 Thursday, crude oil wavered between small gains and losses, but finally closed the day 0.17% lower. What’s next for the black gold?
Crude Oil’s Technical Picture
Let’s take a closer look at the charts and find out (charts courtesy of http://stockcharts.com).
Quoting our alert posted on May 30:
(…) If (…) crude oil moves lower, the first downside target will be the long-term green support line based on the August and November lows (…). If crude oil drops under this important support, the next target for oil bears will be (…) the previously-broken lower border of the red declining trend channel (…)
Looking at the daily chart, we see that the situation developed in line with the above scenario and crude oil reached our downside target yesterday. Although this support line triggered a small rebound, the sell signals generated by the indicators remain in place, suggesting another attempt to move lower and (at least) a re-test of the strength of the lower border of the red declining trend channel.
Summing up, short (profitable) positions continue to be justified from the risk/reward perspective.
Very short-term outlook: berish
Short-term outlook: mixed with bearish bias
MT outlook: mixed
LT outlook: mixed
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. We will keep you – our subscribers – informed should anything change.
As a reminder – “initial target price” means exactly that – an “initial” one, it’s not a price level at which we suggest closing positions. If this becomes the case (like it did in the previous trade) we will refer to these levels as levels of exit orders (exactly as we’ve done previously). Stop-loss levels, however, are naturally not “initial”, but something that, in our opinion, might be entered as an order.
Thank you.
Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager
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