Trading position (short-term; our opinion): Short position with a stop-loss order at $63.41 and the initial downside target at $59.38 is justified from the risk/reward perspective.

The overall situation in the short term remains almost unchanged as crude oil futures keep trading at around Tuesday's levels. But can we glean more insights from today's opening prices?

Although crude oil futures opened today with a bullish gap, the sellers took over and pushed prices down in the following hours. This suggests a high likelihood of closing the gap in the very near future.

Should we see such price action, the way to the south will be open. The bears can then follow up with a test of the lower border of the purple consolidation and the next green gap, which is where our initial downside target currently is.

Summing up, crude oil ended 2019 with a bearish reversal, with the downswing supported by the extended position of the daily indicators. Regardless of today's bullish gap, the sellers maintain control over today's trading action, suggesting that the gap will likely be closed shortly. Our short position continues being justified from the risk-reward perspective.

Trading position (short-term; our opinion): Short position with a stop-loss order at $63.41 and the initial downside target at $59.38 is justified from the risk/reward perspective.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist