The great US oil short. Target $54
Updated
So finally today we touched the very long term downward trend line on the weekly charts (see below). Wow what a run up!
Now on the hourly chart we have a double extreme bearish divergence on the MACDH which usually (as its so rare occurring after long uptrends) signals a sharp reversal. We are trading inside a rising wedge here so we could try and take this all the way down to 54 for profit taking.
If this divergence breaks down and we get stopped out wow that would signal further big bullishness to come.
For the moment though I think the bear side is the best way to play this with a great entry here at 63.3
Hit the follow tag above and I'll post regular updates as always :;
Now on the hourly chart we have a double extreme bearish divergence on the MACDH which usually (as its so rare occurring after long uptrends) signals a sharp reversal. We are trading inside a rising wedge here so we could try and take this all the way down to 54 for profit taking.
If this divergence breaks down and we get stopped out wow that would signal further big bullishness to come.
For the moment though I think the bear side is the best way to play this with a great entry here at 63.3
Hit the follow tag above and I'll post regular updates as always :;
Trade active
Nice inverse cup and handle top now. Often these are more used the other way around to signify continuations but I find they work well to signify tops as well.Also a double top here
Note
Looks to me as though a flash crash may be coming in tech, gold, oil and the wider market due to these pesky bond yields. Dollar is the safe haven today.Trade active
Update:Friday before close I took 45% of my position of the table with a nice big profit down to 91.4. This was because hourly moving averages were still very bullish and price was near an up trending trend line and the hourly 200HMA. This also enabled me to leave 55% of my position open resulting in a break even trade if my stop of 94.05 gets hit.
I have fully expected a bounce today especially with the stimulus announcement but as I'm playing the longer trade was happy to keep it open rather than swing trade (as we never truly know where swings will occur). My overall bias is still short as the daily candle reversal pattern (see below) was very clear and fundamentally we are expecting OPEC to increase supply this week which should further drag prices down.
I have though raised my TP as shown as I have decided the larger wedge trend line cant be trusted as its drawn from point zero dollars which doesn't accurately reflect the negative prices we saw last year. 58-59 is a much better TP for the remainder of this trade
Note
To help us more clearly understand the short term picture, we can see the 15 min moving averages are very bearish (although the flat 200 15 min ma indicates bulls have some power to move prices up). We could attempt to add to shorts on any rallies provided the 15 min death cross remains in play Trade closed: target reached
I have this morning closed out the rest of my oil short here at 59.76. This is because we are bounced at 59.3 and then had a fakeout on a small bear flag shortly after (1 min moving averages still bullish at time of print). I have taken really nice profits here, I just don't see the sense In holding for more while we are trading below the hourly 200 moving average without a death cross. We may sill go lower short term but for now it's too high risk and the stop loss is too wide. I would rather take all profits now and look to short another upswing if it happens, if it doesn't and we hit 58-59, I'm still a big big winner on this trade, for me its about managing risk here due to how fast we moved down the last 2 to 3 days.
I'll still be trading Oil swings on this trade anyway will post updates if I take more positions, if you still want to follow.
Trade active
Here we have another opportunity to try a short again after the rally to close to $62. We touched the neckline of the head and shoulders and the hourly moving averages have a death cross in play (I tend to prefer 100 and 200 MA death crosses not 50 and 200MA as they are more reliable).
If we start to see the hourly 200 moving average curl down we should see a move down again to the TP zone of 58-59. I'm using a stop at 6385 for now due to possible volatility around the OPEC meeting. If we do move down to 58 this will be interesting as we now have a layer of price action which will act as resistance if the big wedge shown is broken. As with all moves though I will be taking profit at the breakout point and seeing what happens after. Breakouts notoriously fail.
Everything will depend on OPEC so keep your eye on the meeting this week.
Trade closed manually
Hopefully you guys closed out the remainder of your shorts today before your stops were hit, Trading view doesn't have an option to post trade updates from the app so I cant always post when i'm not at my desk. It was very clear though that the price action was showing us what opec was going to do today!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.