Following a very intense period in the oil market, with crazy contango and extreme volatility, it does appear Oil have started trading more normally.
Looking back, we have seen an extremely climatic downward move after the upward breakout of the bearish trendline.
Im not sure exactly how to read the test of the new low indicated on the chart, there was some extreme contango related to corona and massive oversupply of the oil storages which many smart traders did foresee.
However looking at the shorter term outlook it does look like bullish reversal traders hold the advantage of this price. The reversal spike should have been enough to switch always in direction long, and the current upwards move have good signs of bullish strenght.
1. Very large bullish spike with great momentum.
2. Breakouts to new highs leads to more follow-through buying.
3. Pullbacks are very minimal.
That being said, I believe there is still more room to the upside in this move, and will only look to buy.
The recent test of a new swing high shows, so far, no bullish follow-through. I will patiently away a long set up to present itself, given the low volatility right now Im unsure when that will be.
I feel confident many traders have placed their trend-stops too tight indicated by the green line. If this leads to a failed breakout to a new high, Im hoping to see an aggressive downward move hitting these tight stops and will be looking to buy them up in the green zone.
Once entering the green zone, Ill look for a short term reversal setup to the buy side, with target to test a new high.
If we break down below the stop-loss level around 30.82, and this trade gets follow-through selling. I will stand by and wait for more price action to unfold.
Good luck out there!
Looking back, we have seen an extremely climatic downward move after the upward breakout of the bearish trendline.
Im not sure exactly how to read the test of the new low indicated on the chart, there was some extreme contango related to corona and massive oversupply of the oil storages which many smart traders did foresee.
However looking at the shorter term outlook it does look like bullish reversal traders hold the advantage of this price. The reversal spike should have been enough to switch always in direction long, and the current upwards move have good signs of bullish strenght.
1. Very large bullish spike with great momentum.
2. Breakouts to new highs leads to more follow-through buying.
3. Pullbacks are very minimal.
That being said, I believe there is still more room to the upside in this move, and will only look to buy.
The recent test of a new swing high shows, so far, no bullish follow-through. I will patiently away a long set up to present itself, given the low volatility right now Im unsure when that will be.
I feel confident many traders have placed their trend-stops too tight indicated by the green line. If this leads to a failed breakout to a new high, Im hoping to see an aggressive downward move hitting these tight stops and will be looking to buy them up in the green zone.
Once entering the green zone, Ill look for a short term reversal setup to the buy side, with target to test a new high.
If we break down below the stop-loss level around 30.82, and this trade gets follow-through selling. I will stand by and wait for more price action to unfold.
Good luck out there!