Trading position (short-term; our opinion): short position with a stop-loss order at $59.77 and the exit target at $53.05 is justified from the risk/reward perspective.

The bulls closed yesterday on a strong note. And today, they're grappling with another resistance level. Will they succeed? Or will the bears return to the trading floor soon? Let's take a look at the chart to assess the odds.

We'll take a closer look at the daily chart below (chart courtesy of www.stooq.com ).

Crude oil futures extended gains and reached the next obstacle earlier today. This resistance zone is based on the red gap created at the beginning of August and the 76.8% and 78.6% Fibonacci retracements based on the mid-July-August downward move.

Despite the bulls' attempts, the bears prevented the price from rising much further, and a pullback followed. Additionally, the CCI and the Stochastic Oscillator moved to their overbought areas, increasing the probability of reversal in the very near future.

Summing up, the bulls have added to their yesterday's gains, approaching another resistance level. There, they are meeting stiffer headwind than was the case yesterday. The CCI and Stochastics are now in their overbought areas, increasing the probability of an approaching reversal. The short position remains justified.

Trading position (short-term; our opinion): short position with a stop-loss order at $59.77 and the exit target at $53.05 is justified from the risk/reward perspective.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist