Crude Oil / WTI short cheap and good time to bounceVolatility on WTI has been very strong on past years but is narrowing. Especially in past months we can see a seemingly tightening volatility in prices. And we all know what that means right ?!
Correct, a breakout will follow. The questions is only in which direction. A good risk ration is achievable since we are very close to a bounce level / support (green line) and far away from the next resistance (red line). Commodity markets tend to be mean reverting and whenever commodities are cheap it makes sense to but them. Boom and bust cycles. But this is rather a long term strategy.
In any case, breakdown as below:
Entry:
Ideally we would average down the long position down to 67.28 and potentially below, in case price tests areas below.
Exit:
Ideally we would exit at TP slightly before 80 USD to avoid the resistance and the magical strength of full numbers. Something like 79.4 USD should work.
If price moves against us close at SL or once daily candle break below the support and closes.
In such case we could even consider a short position but with tight TP as fundamental dont point towards much lower prices.
Conclusion:
An easy trade can be entered with good risk reward ratio if executed correctly.
Disclaimer: This is non financial advice
let me know if any question.
