Today we choose to take a look at the bigger picture in OIL (Light Sweet crude). My two charts below show the weekly and monthly price action that is clearly sideways and trend remains neutral. How can these two charts help us with trading? As long as Oil is trading within the big sideways triangle I plan on taking short positions near the upper boundaries of the triangle and long positions near the lower boundaries of the triangle.
Currently Oil price is supported by the Ichimoku cloud and as long as it stays above 98.15$, it has more chances of continuing its short-term up trend towards the triangle boundary and the 107-108$ price level. If support fails I believe that price will move towards 93-94$ support. Using an acceptable stop loss, I believe reversing any position if prices break out of the triangle will bring in more profits than the loss made by hitting the stop.
The monthly chart below shows clearly the sideways consolidation and also shows that the Ichimoku cloud provides strong support at 90$. Having the Ichimoku cloud below current price, favors an upward break out and thus long positions at current market prices as support levels (98.15$) are closer than resistance levels (108$) in the short-term.
Concluding, my long-term support is found at 90$. A pull back towards 94-95$ is a buy opportunity with stop at 90$. A move towards 108$ and a rejection would imply a good shorting opportunity. If a break out occurs out of the triangle, I’m going to trade in favor of the break out.
As always, thank you for taking the time to read my new post.