The Best Trading Opportunity Today – January Crude Oil – November 17, 2015

January crude oil is the market to watch today for the best trading opportunity. Following a prolonged move down in terms of price and time, the futures contract posted a potentially bullish closing price reversal bottom while in the window of time for a change in momentum.

The main trend is down according to the daily swing chart, but yesterday’s lower-low, higher-close may have been an indication that the buying is stronger than the selling at current price levels. The trend is not likely to change to up on the expected move, but there may be a strong enough rally to produce a 50% to 61.8% retracement of the recent break that may last 2 to 3 days.

Yesterday’s range was $43.24 to $41.21. Its mid-point or pivot is $42.27.

A trade through $43.24 will confirm the closing price reversal bottom chart pattern. If there is no confirmation then look for crude oil to retrace into the pivot. Aggressive counter-trend buyers may come in on a test of the pivot.

A trade through $41.21 will negate the chart pattern and could create enough downside momentum to challenge the August 24 main bottom at $39.97.

The best trading opportunity will come in on a sustained breakout over $43.24. The first barrier the market will have to take out is a steep downtrending angle at $44.23 today.

Confirming the closing price reversal bottom chart pattern will also create a range between $49.23 and $41.21. If the move can extend beyond the angle at $44.23 then look for a 2 to 3 day rally into the retracement zone at $45.22 to $46.17.

Watch the price action and read the order flow at $43.24 today. Trader reaction to this level will tell us whether the bulls or the bears are in control. Unless you’re an aggressive counter-trend trader, the best trading opportunity is a breakout over $43.24.

Trader reaction to the pivot at $42.23 will also tell us a lot about the market. Holding this level will indicate that some light buying is coming into the market, but we’re looking for a shift in momentum to the upside on a sustained move through $43.24.