Is Now The Time For Oil Shorts?
Calling a top in any market is hard enough in its own right, calling a top in the Oil market is near on impossible. The last four months in Oil have been nothing short of amazing (If you are an Oil bull) that is. Rising from the low of $45 per barrel, now currently sitting just under $65 per barrel at the time of writing.
Looking at the chart from a technical perspective, the monthly and weekly candles are forming bullish marabozu candles, heading straight into some monthly resistance at $64.75/$65.00. Taking a look at the lower time frames, the daily chart is showing signs of deceleration around the $65 per barrel handle. Yesterday's candle close was a nice doji candle, and today's candle is looking to form an inside bar, showing signs of further decoration and indecision within the market. Now, we could be potentially stalling at this level before pushing even high up to our next resistance level at $66. Alternatively, declaration at this level could give us an early sign of a potential reversal at $64.75.
Dropping down one-time frame to the 4 hourly, we can see a nice double top forming, which is a bearish reversal pattern within the market. Looking at the daily and 4 hourly charts together, we can see they are very overextended and in dire need of a pullback. A strong daily close above $65 and this opens the door for a quick dollar move straight away to $66. Further rejections off $64.75 and the market could slowly pull back to $63.50 or even further to our upward sloping trend-line at $62.00. Look for early candlestick patterns and price patterns around this key level to give us early indications of the next move....