Oil - Rangebound 45.62-50.37

Oil has seen a weekly/daily range in place in 2008 and again created in 2015 that has repeated; between the now continued oversupply vs geopolitics; I believe we may see oil rangebound in this 45.62-50.37 zone;

Entry Buy/Long: 45.62-46
SL: 44.8
TP1: 46.81
TP2: 48.00
TP3: 49.18
TP4 50.07

As per the norm, I will be taking partial profits at each Target Price Looking for lower levels to re-add long positions.

Comments and questions are welcome, good trading all!

Comment:

Using my method of marking supply/demand levels; inflection which tend to create prices ranges; form 2008 that have carried over into he past few years.

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Comment:

I should explain the quarter lines on the chart above as its not my typical method of marking daily supply/demand; note in the weekly (split chart) that I used my method on the 2008 weekly levels to identify this range; Ranges tend to often create fractals and generally have a very strong midpoint, in this case 48; as well as 1/4 and 3/4 marks as prices consolidate; this is why my targets are quarter marks rather than my typical daily supply/demand levels taken from recent price action. As well, I think there is a possibility that prices run this range for a month or two.

Comment:

If you have been taking partial profits at the TP's; great job on those profits! I saw no pullback opportunities on the way up to re-add. To the upside, 48.7 has a strong inflection level on the 4 hour and daily June chart at 48.70; I will take profit on the majority of my positions at 48.68 and potentially re-add at 48.15 (depending on how price reacts to 48.15 in the short term); more on that if that scenario plays out.

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Good trading all

Comment:

5/14 Update: We finally have the pop up to that 40.68 level (this rectangle is based on 4 hour inflections at 48.13 and 48.70; i like to at least give a couple cents of buffer!) I've moved the potential bottom retrace to 48.15-48.22; As we have news of Cut Extensions and the pop we saw in prices earlier, I'd expect a bit more upside this week, so a pullback to 48.22 may be a good case to re-add some of those long positions if you took partial profits at the first 1 TP's. I would again recommend taking partial profits if prices reach the 49.18 TP this week as I believe 49.18-50.40 being the top of the daily range is selling territory. OPEC and FOMC over the next few weeks likely brings much volatility.

In summary, I'd expect a pullback to 48.13-48.22 and believe it's a good place to re-enter long positions if you took some profits previously. I will close majority of my positions at he 49.18 level if it is reached this week.

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Comment:

TP3 reached; prices blew right past the 48.7 mark where I was expecting temporary resistance; after hitting the 49.18 target so quickly and on such low volume, I am feeling very neutral here; expecting some pullback. Will reassess and add an updated chart when prices settle a bit.

Comment:

Very tough making intra day calls when prices are in middle ground of a range as we are here; with prices blowing through the 48.15-48.70 zone i had expected prices to swap around in on the last update chart, I have to assume that zone will act as a buying area; and regardless of the pullback, I expect a retest of the 49.2 level, potentially up through the TP4 level.

Comment:

The top of that zone does indeed appear to have reacted as a buying area; prices bounced off the 48.7 level and so far appear to be holding above the 4 hr demand line. With even mildly bullish reports i'd expect the 49.2-50.4 zone to come into play. Bearish reports would likely pull prices into he 48.15-48.7 zone. I'm anticipating mildly bullish reports this week.

Good trading all!
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Comment:

Well we saw half of the swap zone in action on a bearish API report but prices have again refused to recognize 48.7 from the bottom side; EIA can be hit or miss but I am still expecting a some what bullish report, especially after the run back up in prices; af having run right back above the 48.7 mark, again, expect that to work as support; if that is the case following this mornings EIA report, then I'd look prices to attempt to crack 49.18 resistance again and go to work in the upper level of the overall range (49.18-50.37)

Good trading all!
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Comment:

As well, I adjusted the supply line to last nights swing down.

Comment:

Well we saw a full on rollover cycle this week; so far it is hinting to me based on July contract volume that July is buying. that 48.15-48.70 zone bottom held strong and I'm now looking for prices to take out the 49.18 level with a daily close above it and I anticipate we'll see TP4 within the next couple trading days. As you can see on the left side of the chart, the circled area at 49.18 was a very busy cluster with a fairly clear apex at the 49.18 level where the sellers eventually took over; which is why prices have had such a tough time getting enough buying power to break back above it.

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Trade closed: target reached:

Final Target Price 4 reached; I'd initially thought that prices may stay contained in this overall range for a couple of months but having created a price 'structure' in the red box prior to breaking higher, I am starting to think we may see 51.6-52.4 levels prior to a move back down to test the 48-49.2 structure. I should have a chart out this weekend showing my thoughts on that.

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Good trading all!