Yesterday we witnessed a good attempt to move to the downside. The sellers were partially rebutted. How did the big picture stand the test of yesterday and what are we to do about it?
Let’s examine the chart below (charts courtesy of
https://stockcharts.com).
Yesterday, crude oil increased a bit after the market’s open and hit a fresh January high. On an intraday basis, that is. The combination of the 38.2%
Fibonacci retracement and the upper line of the purple rising trend channel stopped the buyers for the third time in a row. The price
reversed down and even if it ended the day way off the lows, it was still a clear down day. In the near future, we are likely to get more confirmation of the approaching move down in the form of higher accompanying
volume than yesterday– that would represent more of a conviction of the sellers.
Black gold closed the day slightly below the upper border of the red consolidation based on the December peak. We can read this as invalidation of the earlier breakout, which is a bearish development. This is further underlined by the Stochastics Oscillator ready to flash its own sell signal.
Recent observations featured in our
Oil Trading Alerts remain up-to-date also today. The odds favor the move to the downside. At a minimum, we are likely to see a drop to the lower border of the purple rising trend channel in the very near future. If this support doesn’t hold, the next downside targets would be the 50-day moving average (currently at around $50.72) and the green support zone around the $50 mark.
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Thank you.
Nadia Simmons
Forex & Oil Trading Strategist
Sunshine Profits - Tools for Effective Gold & Silver Investments
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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.