WTI Oil - Short - July Contract
Updated
Hello,
WTI has had a strong run up since April 28th and rode in an Ascending Channel. WTI broke lower out of the Ascending Channel and I was expecting a breakout level of $23.77, but that did not occur as price action tried to retest the high.
I've outlined a few things in my chart. Even though I am short and this chart is mainly providing insight to short opportunities, I will go over a couple bullish obstacles in the near term. There is every chance bulls will want to break $28 and fill a gap around $28.76. If they are able to achieve that price gap fill and have the candle finish above $28 then I believe we will need to wait until the bullish momentum weakens before putting on a short position. However, if the bulls try for $28 and the gap fill, they risk a Triple Top, which I believe will see significant bear pressure.
While there are talks of re-opening across the globe, there is still a lot of work to be done before things return to normal. Storage is still a concern and despite Gasoline demand picking up, that doesn't mean Crude demand has picked up the same level. Therefore, I carry a bearish bias and I'm looking at shorting WTI July futures.
Looking at the chart, we are currently trading within a Horizontal Channel and roughly in the middle of the channel at the moment. With June contracts coming to expiry next week I believe there will be downward pressure on July contracts so there isn't such a wide spread upon rolling over so I'm looking for a downside breakout out of the Horizontal Channel. Initial breakout target can be $21.18, which is the 32.8% Fib level, but expect some support as price moves down towards the 50 day MA.
For those who have appetite for larger targets, I have outlined a price gap at $19.70, which can be viewable on multiple time-frames. If that isn't enough of a Short target for you, then I have also outlined another potential target at $15.45, which is another price gap but found on the 3 min time-frame (less reliable).
Overall, I think it is unrealistic that because certain countries are discussing re-opening or have initiated pockets of re-opening that suddenly Crude demand is back and storage is no longer an issue. I don't think we will see negative prices like we saw for May contracts, but there is absolutely zero chance WTI simply goes up in a straight line and I think it is time for some decent retracement.
Let me know your thoughts and comments. Cheers and good luck.
WTI has had a strong run up since April 28th and rode in an Ascending Channel. WTI broke lower out of the Ascending Channel and I was expecting a breakout level of $23.77, but that did not occur as price action tried to retest the high.
I've outlined a few things in my chart. Even though I am short and this chart is mainly providing insight to short opportunities, I will go over a couple bullish obstacles in the near term. There is every chance bulls will want to break $28 and fill a gap around $28.76. If they are able to achieve that price gap fill and have the candle finish above $28 then I believe we will need to wait until the bullish momentum weakens before putting on a short position. However, if the bulls try for $28 and the gap fill, they risk a Triple Top, which I believe will see significant bear pressure.
While there are talks of re-opening across the globe, there is still a lot of work to be done before things return to normal. Storage is still a concern and despite Gasoline demand picking up, that doesn't mean Crude demand has picked up the same level. Therefore, I carry a bearish bias and I'm looking at shorting WTI July futures.
Looking at the chart, we are currently trading within a Horizontal Channel and roughly in the middle of the channel at the moment. With June contracts coming to expiry next week I believe there will be downward pressure on July contracts so there isn't such a wide spread upon rolling over so I'm looking for a downside breakout out of the Horizontal Channel. Initial breakout target can be $21.18, which is the 32.8% Fib level, but expect some support as price moves down towards the 50 day MA.
For those who have appetite for larger targets, I have outlined a price gap at $19.70, which can be viewable on multiple time-frames. If that isn't enough of a Short target for you, then I have also outlined another potential target at $15.45, which is another price gap but found on the 3 min time-frame (less reliable).
Overall, I think it is unrealistic that because certain countries are discussing re-opening or have initiated pockets of re-opening that suddenly Crude demand is back and storage is no longer an issue. I don't think we will see negative prices like we saw for May contracts, but there is absolutely zero chance WTI simply goes up in a straight line and I think it is time for some decent retracement.
Let me know your thoughts and comments. Cheers and good luck.
Note
Shorts Entered 27.83SL 28.30
TP1 - 25.50
TP2 - 24.19
TP3 - 23
Note
SL was moved up 28.50
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