Oil Long - Post OPEC Groin Kick

In a previous chart 'OIl Rangebound - 45.62-50.37' I targeted a 50.4 upside and assumed that prices may stay ranged in that overall zone; but prices broke above; so my next 'Kitchen Sink' chart looked at 50.4 as a buy level; but prices broke hard back down below. So... I do not think that the upside was a false upthrust, I believe that prices are pivoting the 50.4 level until a larger breakout occurs, which I believe will be to the upside. After much excitement of my last buy level at 50.4 being reached it was soon thwarted by a swift kick in the groin by OPEC and I saw my long entries stopped out. Never makes for a fun day... Based on weekly levels (discussed in the 'Oil - Rangebound' chart, I believe oil was in a 45.6-52.40 range; however during the past 2 weeks prices have seen significant bounces on a weekly level at 45.6 and 48.21 (both major weekly inflections from 2008 and 2015) - I will repost the weekly chart discussing those long term weekly inflections later this weekend. Following yesterday's drop, if prices had remained near the 48.21 level, I would likely have been short minded still looking possibly for the 46-47 level; however, as we saw a significant bounce at the 48.21 level on high volume; I believe that yesterday's ugly drop was just a correction and that weekly markup will continue to the upside. As we have FOMC likely raising interest rates mid-June, I am guessing that prices will remain in sideways consolidation potentially between 49.01-51.60, potentially 52.80 level. The next few week's EIA reports and DX sentiment heading into FOMC will of course have a large impact on these coming swings.

Trade Setup:

Buy/LongL 49.01-49.65
TP1: 51.25
TP2: 52.40
SL: Still working on this; please reference the Potential Spring zone and lower demand zone

I would expect that prices continue up to test the 8/9 MA level and possibly 50.4 level prior to heading back down to the entry zone, we'll see next week. I'm still shaking of last weeks bumps and bruises; and patiently waiting for the next opportunity. Again, I will update this later with the weekly levels used from 2008 and 2015, it is quite interesting to me how significant they still are.

Have a great weekend and happy trading next week all!

Comment:

My charts always have levels, usually marked supply or demand but just price inflections that I view as interim buying or selling climaxes, so, a place where there was a continued markup and selling finally overcame buying; This creates a buying climax or supply level; which in the end is just a price inflection. My levels are used just like Pivots, but I only use closing prices and have a few simple rules. I've had a few ask about them so here is a chart explaining the rules for my method.
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Comment:

This chart shows how those supply/demand levels came into play when choosing a potential long entry on a pullback based on a strong Supply/Demand Exchange zone (I use those same rules on any timeframe); as well what I will look for when deciding on a stop loss.

Thank you again to @kate25 for tuning me in to the supply/demand exchange.

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Comment:

I mentioned adding a weekly chart showing the 2008 and 2015 levels used, this is not it; this is a weekly view of the July contract and shows some price alignment on different July chart timeframes. I will post the 2008/20015 level chart this weekend, it is the most important view long term.

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Comment:

This is the weekly chart mentioned above that shows the long time strong weekly levels from 2008 and 2015

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Comment:

And here is the same chart, with 2015 levels added and a current view showing that prices are still reacting to those levels on a weekly timeframe. These level are important in my overall view of prices potential range.

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Trade active:

This trade is active, prices have entered the 49.01-49.65 buy zone.

Comment:

Intraday view on a 4 hr; hoping we'll catch the broken TL and then move up to the next zone.

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Comment:

Prices saw a full run through the buy zone today, the bounce at the bottom was a good sign so far; I'd like to see prices hold 49.3 (darker shaded buy zone) which is the November 30 breakup bar level. Intraday, on the last 4 hr chart update we saw a bounce form just below the 49.18-49.38 level; I have the same chart here and have adjusted that pivot to a true demand line and include the 4 hour supply line which i'm hoping prices target. Near Pit, prices once again saw that 49.8 level and rejection; which i'd assume was end of day profit taking at the daily 9 MA. It looks like 49.8-49.9 is shaping up as a strong inflection level and we'll likely have to wait until after reports to find out whether short term it will act as a buying or selling level.
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Good trading all!

Trade closed: stop reached:

Unfortunately closed out below the lower demand zone; month end close may have gotten the best of me today; took a beating the past 2 weeks! ug!