Oil running directly into resistance - a quick short idea!
This is an update of my oil call from a few weeks ago where I suggested an inverse head and shoulders pattern might turn oil around.
I believe that the current fundamental environment for oil is favorable so I would not like to fight the trend on any long term basis, but I do believe we can make a quick trade as oil runs into overhead trendline resistance on the chart above. The breakdown line from the bearish wedge will likely serve as resistance and I would not be surprised to see a pull back before oil continues higher.
For a quick trade:
Short oil between $51.60 and $52
Target: $49.75
Stop: $52.30 (or grossly above the trendline above)
I believe that the current fundamental environment for oil is favorable so I would not like to fight the trend on any long term basis, but I do believe we can make a quick trade as oil runs into overhead trendline resistance on the chart above. The breakdown line from the bearish wedge will likely serve as resistance and I would not be surprised to see a pull back before oil continues higher.
For a quick trade:
Short oil between $51.60 and $52
Target: $49.75
Stop: $52.30 (or grossly above the trendline above)
Trade closed: stop reached:
It seems the trendline was completely ignored by the price action which points towards its irrelevance. This line will not appear on future charts. Sometimes you miss!