OIL HURRICANE SURGE|BREAKOUT LONG|TRADING PLAN|

The Mexican Gulf Hurricane that is expected to have a massive impact is yet another addition to the 2020 mishaps collection.

Anyhow, the refineries, oil/gas hubs and the extraction facilities are shutting down for an unknown period of time, and then the scope of destruction will determine how quickly the market recovers.

Oil, having recovered from it's recent downfall, has been reluctant to go higher, being unable to break the horizontal level. The demand was limited by the lockdowns and the sharp drop in the number of flights, with the aviation industry being one of the biggest consumers of oil products.

All these factors have been suppressing the price and the hurricane might just be the trigger that helps the precious liquid to break the chains and go higher, to at least R2, possibly R3.

The lack of any meaningful demand, however, will likely push the price back closer to the R1, but it will be the support, then.

TRADING PLAN:

You can either go long now, expecting the bullish breakout wave, or wait for the clearer breakout and then go long from the pullback.

I am in the first camp, as due to the reasons above, I think that the rally will be short lived but intense. SL below the red line. 3:1 5:1 risk reward.
Trade the idea with call options if you can! Gives better risk reward profile, in my opinion, as you don't need to wait for the breakout this way.

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Comment:

Oil resistance at the level is so strong that even the hurricane did not help...