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Acting on the Prospects for the Oil Rally’s Continuation

Nadia Simmons, SunshineProfits.com
0 Comments| May 8, 2020

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In our previous analysis, we wrote about crude oil’s strength. We emphasized how it was able to break above its declining resistance line and open the day with a price gap, despite numerous previous signals that had been pointing to the downside. We wrote that this strength is likely to take crude oil to about $30 or so, because that’s where the next strong resistance was.

However, we also wrote that based on the triangle-vertex-based reversal, we’re likely to see some kind of reversal on Thursday or Friday, and given the current momentum, it seems likely that it will be a top.

Well, we did see a top.



Crude oil broke below the very short-term rising support line and it verified the breakdown by topping in a quite profound manner. What makes it significant, is the shape of the daily candlestick – it’s a shooting star reversal. The breakdown, the reversal, and the likelihood of seeing a top yesterday or today doesn’t necessarily mean that the final top for this rally is in.

However, it does mean that the easy part of the rally is over. And consequently, we are taking money off the table right away, and we’re waiting for another great buying (or selling) opportunity to present itself. As of today, it seems that we might get a slower rally up to $30 and then we could have a shorting opportunity, or we might see a decline to the previously broken declining support line that’s currently at about $18. Depending on the way in which crude oil moves next, we’ll adjust our trading tactics accordingly.

Summing up, the easy part of the rally is over, so we’re taking profits off the table.

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Thank you.

Nadia Simmons
Day Trading and Oil Trading Strategist
Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager


* * * * *

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 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.


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