Trading position (short-term; our opinion): In our opinion no positions are justified from the risk/reward perspective.

Today’s Oil Trading Alert will be rather short, but it doesn’t mean that it will any less significant. In fact, it will cover the situation from the perspective, which is the most important one for many investors. Today, we will discuss the long-term picture (chart courtesy of http://stockcharts.com).

Crude oil is very, very close to 2 strong support levels: the rising, long-term support line and the 200-week moving average. It seems that each of them could stop the most recent decline, or at least cause it to pause. Their combination, naturally, is even stronger. Consequently, the crude oil price is more likely to move at least temporarily higher shortly, even if the move doesn’t take the commodity much higher.

It simply doesn’t seem likely – based on our experience – that a combination of such strong support levels would be broken at the first attempt. The situation seems too unclear to bet on the rally, though – the move could be small and the subsequent decline – volatile.

Summing up, we continue to think that it’s worth to stay on the sidelines waiting for another profitable buying or selling opportunity as long as we won’t receive more valuable clues about future price moves.

Very short-term outlook: mixed
Short-term outlook: bearish
MT outlook: bearish
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective at the moment, but we will keep you informed should anything change.

Thank you.

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

Gold & Silver Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts