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 Friday, crude oil gained 0.42% and closed another day above the lower border of the declining trend channel. Will we see higher prices of the black gold in the coming days?

Today’s alert is going to be very brief, because crude oil didn’t do anything that would change the outlook on Friday and the same applies to today’s session so far.

The only thing that crude oil did on Friday is that it closed another day above the lower border of the declining trend channel. Nevertheless, the size of volume wasn’t significant (it didn’t confirm oil bulls’ strength) and the sell signals generated by the indicators remain in place, suggesting another downswing and a test of the last week’s lows and the lower border of the red declining trend channel in the coming days.

Finishing today’s alert, it is worth keeping in mind that Friday’s Baker Hughes report showed that U.S. drillers added rigs for the 21st week in a row, which suggests that further gains in domestic production (and likely lower prices of the black gold) are sill ahead us. Therefore, short positions continue to be justified from the risk/reward perspective.

Very short-term outlook: bearish
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.

On an administrative note, there will be no regular Oil Trading Alerts on Tuesday and Wednesday this week due to your Editors travel schedule. However, we will be monitoring the market regardless of the above and if anything urgent and important happens we will send out an intra-day alert anyway.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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