Although crude oil futures again moved higher during yesterday’s session, rising above the upper border of the rising green trend channel and 78.6% Fibonacci retracement, the bulls didn’t manage to hold gained ground. This very same development characterized action in oil a day earlier too.
Earlier today, the futures opened with another bearish gap, invalidation all yesterday’s breakouts. This is certainly a bearish development.
The daily indicators are still very extended, also supporting the likelihood of upcoming resolution to the downside.
Should the futures extend losses from here, the initial downside target for the sellers will be the Friday’s green gap.
Summing up, while the bulls appeared to have made a breakthrough on a closing basis yesterday or the day before, the following day’s bearish opening speaks differently. The lower border of the red resistance zone continues to keep further gains in check. This zone is marked by the upper border of the rising green trend channel, and the 76.4% and 78.6% Fibonacci retracements. The extended daily indicators support a downside reversal too. The short positions continues being justified from the risk-reward perspective.
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Nadia Simmons
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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.