FXEMPIRE
All

The Expected and Thrilling Resolution of Oil’s Consolidation

Yesterday, we wrote:(…) On Friday, crude oil futures bounced off the green gap, which brought about quite a sharp move to the upside. The bulls had a reason to celebrate as it closed the orange gap – certainly a bullish development.
Nadia Simmons
golden pipeline system transport in oil crude refinery

Earlier today, the bulls attempted to add to their gains, and broke above the blue consolidation. Their success proved only temporary, as the price reversed and declined to trade at around $57.35 currently. This means invalidation of the intraday breakout attempt.

Due to the extended position of the daily indicators, we have a reason to expect further decline from here.

Let’s take a closer look at the chart below and assess the likely crude oil price path ahead.

chart courtesy of www.stooq.com

 

 

The situation has indeed developed in tune with the above, and crude oil futures closed yesterday below the upper border of the orange gap. This is a positive development for the bears, hinting that Friday’s strength of the bulls was only temporary.

Earlier today, the futures opened the day with a bearish red gap, which serves as an additional resistance right now. Additionally, the CCI generated a sell signal while the Stochastic Oscillator is very close to doing the same.

All in all, these signs increase the likelihood of the above-described further decline in the very near future. And indeed, black gold is trading at around $56.00 as we speak.

How low could the bears aim? Let’s again quote our yesterday’s Alert:

(…) the first downside target for the sellers will be the green support gap and then the lower border of the rising purple trend channel.

Summing up, yesterday’s action shows a downside reversal. The bears opened today with a gap, and keep driving prices lower. The CCI flashed its sell signal, and the Stochastic Oscillator is on the verge of doing the same. Both support lower oil prices ahead, and the short position remains justified.

If you enjoyed the above analysis and would like to receive daily premium follow-ups, we encourage you to sign up for our Oil Trading Alerts to also benefit from the trading action we describe – the moment it happens. The full analysis includes more details about our current positions and levels to watch before deciding to open any new ones or where to close existing ones. Check more of our free articles on our website – just drop by and have a look. We encourage you to sign up for our daily newsletter, too – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to our premium daily Gold & Silver Trading Alerts. Sign up for the free newsletter today!

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist

Sunshine Profits – Tools for Effective Gold & Silver Investments

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US