Oil (US) has been
consolidating and correcting. It is currently running to important intra-day
resistance level of 40.50. It coincides with 200 sma on hourly chart and also
the high of August 24. There might be a false breakout of the area (very
likely) and a reversal back to 38.50 or even the low of the year 37.75.
As the commodity is in a
clear downtrend only short positions should be opened. There are much higher
chances to make profitable trades trading in the direction of prevailing move
than trying to capture counter trend moves.
Of course, the lower the
security drops the sharper rallies upwards it will produce. I will only
consider it buying after I see it fail to make new lows for a prolonged period
of time. This would be a sign that the downtrend might be over and the
commodity is being accumulated. For the time being such signs are not there and
only sell positions should be considered.
Next levels of resistance if
the above mentioned is broken: 41.50, 42.00 and 42.50.
Key fundamental data today is:
US Gross Domestic Product and US Core Personal Consumption both to be released
at: 12:30 GMT.
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