Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.
Trading positions
- Natural Gas [NGK22]
No new position justified on a risk/reward point of view. - RBOB Gasoline [RBK22]
No new position justified on a risk/reward point of view. - Brent Crude Oil [BRNK22]
No new position justified on a risk/reward point of view. - WTI Crude Oil [CLK22] – Entry triggered!
Long around the $99.55-101.29 support area (yellow band) with a stop just below $92.20 and targets at $113.90 & $120.66.
Regarding risk management, it is always best to define your strategy according to your own risk profile. For some guidance on trade management, read one of my articles on that topic.
Sometimes, we can get kicked off by the market from our trading positions. But does it have to prevent us from securing profits? Well, not this time!
No April Fool’s today – instead, here is a quick review of the trade entry provided in the pre-opening US session on Monday and its “stop-win” dragged upwards on Wednesday.
Film of a Trade (Trade Plan Explained)
The dip took place as the oil market bottomed at $98.44 (facing a rejection from the bulls towards the $100 mark), triggering the suggested entry around $99.55-101.29, highlighted by the yellow band. It happened at the same time when the Kremlin announced a significant de-escalation around the Ukrainian capital of Kyiv and Chernihiv.
Thus, our subscribers got long around that pre-defined landing space (support). Not long afterwards, the first recommended target, projected at $113.90, was half-filled up. My recommended stop – initially placed just below the $92.20 level (March’s swing low) – could now be lifted:
- To new swing low ($98.44)
- To breakeven, or slightly above it
Personally, given the current volatility on the crude, I suggested dragging the stop up to $102.83 (Monday’s low) and then lifting it again to $104.55 (Wednesday’s low) once the prices break the $107.84 level (Tuesday’s high).
Since black gold was at that time trading at $107.20 (we were getting very close to it while I was writing my Oil Trading Alert on Wednesday, as prices made a high at $107.70 that day), I suggested setting a price alert up there (at $107.84).
Monday:
WTI Crude Oil (CLK22) Futures (May contract, daily chart)
Wednesday:
WTI Crude Oil (CLK22) Futures (May contract, daily chart)
Friday:
WTI Crude Oil (CLK22) Futures (May contract, daily chart)
Update: as I was writing these few lines on Wednesday, my alert finally got triggered, so our stop was therefore lifted to $104.55 according to our flying map (trade plan).
Wednesday:
WTI Crude Oil (CLK22) Futures (May contract, 4H chart)
Here, I voluntarily removed the intermediate stop levels for better clarity, although you can look at them in the following chart:
WTI Crude Oil (CLK22) Futures (May contract, 4H chart)
Friday:
As you can see, the level provided was optimum given its possible support function (that is, acting as a floor for rebounding prices).
On a side note, prices encountered some resistance as they were reaching the current month’s Volume Price of Control (VPoC). Therefore, exchanged volumes started accelerating around that level, and we wintessed a new accumulation cycle.
Suddenly, yesterday, the United States announced the largest ever release of crude oil barrels from the US Strategic Petroleum Reserves (SPR), as well as President Biden made a call on oil giants to increase drilling in order to boost oil supplies.
In response, the market retraced back to our support as prices recorded a 7% drop - at the end, we got stopped ideally still profiting from the market reversal (even though a retracement happened).
Who said a strict risk management framework got out a fashion? That’s exactly how important it is for succesful trading!
That’s all folks for today. Have a great weekend!
As always, we’ll keep you, our subscribers well informed.
Thank you.
Sebastien Bischeri
Oil & Gas Trading Strategist
