I see a good shorting opportunity in the future around late Jan to mid Feb.
I'm waiting for similar overbought conditions of the indications as circled and a break of the wedge.
Other things too look for is a break of supertrend and movement under hull.
200 day moving average (light pink line) should be strong resistance if it can breakout above the orange line. A blow off top is possible which could present a good shorting entry too.
One thing to watch out for is a possible retest of the orange line breakout and a move higher.
I'm waiting for similar overbought conditions of the indications as circled and a break of the wedge.
Other things too look for is a break of supertrend and movement under hull.
200 day moving average (light pink line) should be strong resistance if it can breakout above the orange line. A blow off top is possible which could present a good shorting entry too.
One thing to watch out for is a possible retest of the orange line breakout and a move higher.
Comment:
It is starting to look close to a peak to me. On this 3 hour chart, you can see divergence in the RSI and the stoch had a similar formation then breakdown to then make a divergence peak too, this is a first sign to me of a reversal in the trend.
Then the final sign would be the price crossing the daily hull, which is still acting as support, and then of course the change in direction of all the daily indicators that I've already mentioned. The daily RSI and stoch are starting to have divergence, but it isn't clear enough yet. I believe it is very close though, the top could already be in place at 113.
It is starting to look close to a peak to me. On this 3 hour chart, you can see divergence in the RSI and the stoch had a similar formation then breakdown to then make a divergence peak too, this is a first sign to me of a reversal in the trend.
Then the final sign would be the price crossing the daily hull, which is still acting as support, and then of course the change in direction of all the daily indicators that I've already mentioned. The daily RSI and stoch are starting to have divergence, but it isn't clear enough yet. I believe it is very close though, the top could already be in place at 113.
Trade active:
With this gap up, I have now entered a short by buying SCO. You can see in the chart below that USO has reached the peak of the regression trend which is usually a point of reversal. There is a possibility of it breaking out of the trend just like it broke down below it previously.
I am keeping a tight stop on SCO just below the bottom of today at 8.84, since I believe that this should turn fast now that it hit this area and if it doesn't do that, I would prefer to say out and see how much higher USO can go or wait until the indicators show a turn around. So this is a low risk - high reward entry, the way I like it!
I am keeping a tight stop on SCO just below the bottom of today at 8.84, since I believe that this should turn fast now that it hit this area and if it doesn't do that, I would prefer to say out and see how much higher USO can go or wait until the indicators show a turn around. So this is a low risk - high reward entry, the way I like it!
Trade closed: stop reached:
Hit my stop and I'm out for now.
I'm now waiting for the indicators to catch up and start to show signs of weakening momentum. It might dump faster than last time though, since it hit this resistance milestone.