OIL: Playing Out Perfectly
Yesterday, late morning I updated a potential short trade idea on WTI for our EFX members. As highlighted multiple times in other free articles and videos, the $64.50/$64.75 region is a great resistance area for the commodity. Having formed quadruple tops since the start of the month, we can see a nice range developing from $64.75 to $63.00 with multiple touches on either side.
Each time we have reached the boundaries of our range, we have formed either bearish or bullish candlestick formations to reverse us back into the 175 PIP range. Late yesterday morning we were at the upper ends of our range at $64.50 and decelerating nicely with further bearish candlestick formations. We can see from the 1-hour chart below, we had roughly 11 hours of declaration at our resistance level and the latter half of these candles were bearish/negative shooting stars and doji’s. further adding confirmation onto our bearish bias.
You can see from our screenshot below we took a 33 PIP stop-loss with a 86 PIP target, giving us a risk to reward of 2.66%. The trade raced quickly towards our target and took us out 19 hours later for a full 86 pip profit.
Where to now? The weekly is suggesting some further downside movement with a nice pair of tweezer-like candles but, we have our upward sloping trend-line on the daily chart which has supported price very nicely throughout the year, a nice clean break of this and it opens the door for a drop down to $62.00 our next support region. On the top side, we need to clear $65 which is proving a tough nut to crack, a strong daily closure above this level and its off to the races....