Short

Crude met its match?

Updated

After an aggressive extended rise, has crude oil met its match at the 11 year resistance level of $62.58? Good reversal price action after hours: prices flash spiked to $62.56 early in the after hours session, hitting just below the 11 year resistance level before immediately dropping down into the $62.15-$62.25 range. This looked like saudi traders trying to hit the buy stops to blow through the $62.60 resistance level without success. 4 hour charts and daily charts showing a nice bearish pin bar forming - a strong short term reversal signal. RSI well overbought at 82%-91%. Add to this that this is day 22 of an extended 3rd wave following a strong 5 wave uptrend (see my prior "Fall drive for $55" bull analysis from $42.26 that blew through my $55 target) and has crude finally met its match?

Great risk/reward at this level. Looking for at minimum a weak 28.6% retracement to the $59 level, but possible stretch to see 38.2% to $55 level.

New short entry at $62.20
Immediate 2 day price target: $61.40
long range price target: $59~
long range stretch price target: $55~

Are you in?

Trade closed: stop reached

First short attempt, stopped out with a tight stop. Capital preservation if prices did not immediately head towards my 48 hour target price.
Ready for new short entry when warranted by price action.
Volumes remain high but price ranges are narrowing dramatically. Looking for a god range expansion on high volumes to get short again.

Trade active

A minor head and shoulder is forming on the hourly chart with a good risk/reward entry at $64.00. I am looking for the right shoulder to be weak on low volume topping at most $64.25 before failing back below $64.

2nd short entry - $64.00
Immediate 2 day price target: $62.55
Short term price target: $61.40
long range price target: $59~
long range stretch price target: $55~

Note

This week closed out with a Friday retest Towards the $64.77 price high but fell short then settled at $64.40. Volumes were lower than the peak yesterday. Supports a right shoulder is in place on the hourly short strategy. Still short into Monday and looking for an aggressive price drop at open.

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Hmmm barely a new high ($64.81 vs. 64.77 last week) on super low volume..sure looks like a hanging man top to me...that's where my calculated bet is placed.

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Still short and we are at a critical point. Today will determine if the trend line breaks down or holds firm. $63.70 is the pivot point. Let's see if we can take out a bunch of bull stops today!

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Running on the trend line, with aggressive spikes below it....I'm looking for a full breakdown of the trend line and possible backtest to the trend line before aggresuve drop as bulls capitulate to a short term drop into DCL between $55-$59

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Overnight action supports price correction, looking for an acceleration with NY open towards $59 target. Still short...
Hourly is accelerating and just pierced soft target of $63.33.

Daily is just starting looking for $62.55 to be hit within 48 hours...

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Right before NY open and we are on the precipice if a breakdiwn. Let's see if the mild resistance holds or breaks down....if it breaks diwn, prices should accelerate quickly.

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Backtest of trendline on the hourly with a good rejection.

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Lower low & lower high on the daily. Supports short position. Staying patient here.

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Backtest of trendline is forming a strong head and shoulders on the 4 hour chart. If neckline fails trend us reverse, if neckline holds, this idea is invalidated.

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Still holding short, the volumes are evaporating as the right shoulde forms. This is a strong trend reversal signal.

Even clearer on 4 hour chart

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and...minor neckline breakdown overnight, which is very odd for oil. I expect a recovery pop back above $64 from the NY market today (Friday) followed by a much steeper breakdown next week. Be patient, keep your stops above $65.50 and hold on.

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Bull trap starting. I'm looking for prices to rise above $65 before reversing. Will add more shorts once the top is in.

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Heading for $65

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Still moving between $64 and $66.50. Rising trend lines continually invalidated, broken then back tested. Short any moves above $65.50 on any backtest to last trendline with $66.50 looking like the ICH.

Zaiteku7

Related publications

Fall drive for $55

by Zaiteku7

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