Brent Crude OIL UKOIL Trade Set-Ups for this Week Position: Flat - Just didn't trust this short after it bounced at 61.70 first target and then started to build a near term low at 61.33 so closed out the short for just over 100 pips after spreads, as per updates to last comment. Disappointed at the time to close out a trade that had stopped behaving according to expectations. Not so disappointed now though. Brent is now testing the original break-down level at 62.88 after a high one pip higher on Friday. The zone between 62.88 and 63.10 is a treacherous range, full of uncertainty and potential whipsaw - a difficult spot to trade...it should fall away from here, but that behaviour at the highs doesn't look bearish except in very near term: a tiny flag is forming and Brent can be shorted here with a stop above the upper parallel, all the way back down to the lower parallel where the position should be reversed on the first touch, flipping back long again here, with stop 30 pips below the line. The ideal entry back long would be at 62.30 with stops 30 pips under. Continuation patterns like the last one - and potentially this one too - usually only have two touches on the lower parallel before moving higher, the second touch coming quite late in the pattern, and ideally, for bulls looking for clues, leaving a few pin bars off the lows (see last continuation pattern for comparison). So it's a buy on the next touch of that lower small parallel (stop 30 pips under) for a move back to 62.88-63.10 where look to close out if this trade works out. Then look to see if Brent can start to build a base at 62.88 as we move through Monday into Tuesday... We need to watch out this week coming for any such price action and follow with longs again if we see it develop, looking for another move up to 64.16-64.25 range initially and thereafter back to the upper parallel once 64.30 has been broken on the upside. Good idea to split this into two trades. On the downside, first support for Brent is that small lower parallel creating the near term flag - at around 62.26 if hit early on Monday morning in far East and as low as 62.04 if it comes later in the day - but there should be only one direct hit, as with the last pattern and ideally it will leave pin bars on the 1 hour chart. All bullish indicators that can be used to prepare new longs. Barring a brief shake out from currrent levels, as above, Brent will have to move below 62 to flip back into serious bear territory from here, triggering aggressive shorts down to 61.70 at least, and potentially to 61.33. But whilst that little flag holds, upside is more likely this week coming.
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