The question on everyone's mind is of course "have we bottomed out?". Personally I believe it doesn't really matter.
For most of the week, we traded within the triangle and only overshot to the upside on Thursday. However, bulls merely managed to retest the previous high around 31.70 before facing rejection yet again. If they were strong, I would have expected a new high or at least a rally to the unbroken at around 32.50ish.
Here are my possible scenarios:
1) We just created a new range of 30.0-31.70ish and price will continue to fluctuate within it. Monday's a holiday, so it's totally possible we'll see more ranging until Tuesday and that range would make sense.
2) Price will start respecting the (now narrow) triangle again and remain below 31.0 with price being rejected at the upper boundary of the triangle. This would suggest an incredible boring tight range today...and I think despite the holiday, this range is possibly too tight for a relatively volatile pair like oil .
3) Price will break 30 convincingly and head towards 29, which would suggest bears are still solidly in power. Price stalling at the important 30 level made sense, but if it breaks, it's clear the bulls aren't in the driver's seat yet.
4) Larger retracements long to the , 33.20ish and maybe up towards 34.0-34.50 range. The long term above that is at 36.5 but given how week bulls currently seem, I can't really see it get there...possible though of course.
In all those cases, my plan of action is as follows:
BUY at the of 30.0 using a tight stop loss. I still think the overall long term trend is short and hasn't switched to long yet (with both my DMIs still short on H4, D and above). Personally, it'll take a while for me to fully trust bulls again. I am inclined to take profit sooner for longs if price runs into a brick wall at the resistance levels mentioned above and we see a clear rejection.
SELL whenever price hits one of the resistance levels AND faces strong rejection (like yesterday at 31.70). Basically, I am looking to sell at 31.70, 32.50, 33.20 and above that in the 34.0-34.5 region. I don't expect that to be broken, but if it does, I might consider shorts around 36.5 again. Around 31 we have a possible rejection level too because of 2 open prices around there this week...but I consider this a weaker . I might still take a few sneaky short term longs whenever resistance levels are broken though, but only up to the next above the entry.
In short, I don't really care if it goes up or down...I'll buy only at support and will wait for price to get to key resistance before shorting.