Crude not looking too slick – sell rallies
Updated
Trade Perimeters:
Given the underlying trend developing we hold a short-term bearish view on crude. US Crude oil has extended its decline from the early October high’s, and clearly has not helped by a monster 9.88m build in the weekly API inventory report. All eyes now fall on the more official DoE inventory report at 01:30AEDT, and we look for an extension of the bearish price action on any number above the 3.5m build expected by oil analysts.
Given these factors, it's hard to be long crude oil right now. However, as we approach the August swing low (and double top neckline) of $64.43 the prospect of supportive rhetoric from OPEC nations should ramp up. With that in mind, our preference, at least in the short-term, is to sell rallies in the barrel into $67.70 and ride the bearish momentum, targeting $64.43. Although there is a significant support band around the $62.00 and $63.00 mark, which coincides with 38.2% Fibonacci level of the last major range.
With the technical damage in play with price breaking through the May uptrend and 200-day MA we feel trading from the short-side is still the higher probability play. We would use any strength $67.70 to initiate shorts positions, with $64.50 as a target. Stops to cover a reversal at $70.00.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Given the underlying trend developing we hold a short-term bearish view on crude. US Crude oil has extended its decline from the early October high’s, and clearly has not helped by a monster 9.88m build in the weekly API inventory report. All eyes now fall on the more official DoE inventory report at 01:30AEDT, and we look for an extension of the bearish price action on any number above the 3.5m build expected by oil analysts.
Given these factors, it's hard to be long crude oil right now. However, as we approach the August swing low (and double top neckline) of $64.43 the prospect of supportive rhetoric from OPEC nations should ramp up. With that in mind, our preference, at least in the short-term, is to sell rallies in the barrel into $67.70 and ride the bearish momentum, targeting $64.43. Although there is a significant support band around the $62.00 and $63.00 mark, which coincides with 38.2% Fibonacci level of the last major range.
With the technical damage in play with price breaking through the May uptrend and 200-day MA we feel trading from the short-side is still the higher probability play. We would use any strength $67.70 to initiate shorts positions, with $64.50 as a target. Stops to cover a reversal at $70.00.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Trade active
Trade closed: target reached
Given the target price has been reached $64.50, this trade has been closed with a profit.
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