Oil: wedge breakout + ascending channel
Updated
Oil (WTIUSD) has yesterday broken (orange arrow a wedge pattern that started shaping on the beginning of May.
Then it went back in the wedge briefly on the market reaction to the news that the FED will keep raising rates, but that is not really a novelty and, in parallel, there were guarantees from the several big OPEC producers that they will what is necessary to keep oil prices moving upwards from these levels. Furthermore, reserves in the US declined.
Combined this tells me the break is intact and that gave us an ascending channel that is not yet confirmed as a relevant formation but I will be working with it as a possible pattern in the making.
I have drawn a level of support turned resistance on the daily chart (purple horizontal line). This level sits just before 74.
I have just opened a small long position aiming at 73 and will possibly accumulate 1 or 2 more small positions of equal weight into next week, especially if price comes down, hits support (wedge or channel) and confirms my reading. If this is the case will set TP of these better priced longs to 73.9
Then it went back in the wedge briefly on the market reaction to the news that the FED will keep raising rates, but that is not really a novelty and, in parallel, there were guarantees from the several big OPEC producers that they will what is necessary to keep oil prices moving upwards from these levels. Furthermore, reserves in the US declined.
Combined this tells me the break is intact and that gave us an ascending channel that is not yet confirmed as a relevant formation but I will be working with it as a possible pattern in the making.
I have drawn a level of support turned resistance on the daily chart (purple horizontal line). This level sits just before 74.
I have just opened a small long position aiming at 73 and will possibly accumulate 1 or 2 more small positions of equal weight into next week, especially if price comes down, hits support (wedge or channel) and confirms my reading. If this is the case will set TP of these better priced longs to 73.9
Note
I am going off for the weekend, so... here is an update: things worked out perfectly for this one. Price went on to test wedge resistance-turned-support, I loaded on 3 more positions along the way and just closed 75% of the total. Will let the remaining run after setting SL to breakeven.Trade closed: target reached
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