Oil reports can give some support to oil bulls
In the latest monthly oil reports the demand growth forecasts didn't change and slowing production growth in H1 2019 due to production cuts could bring some stability around the 50% fibonacci level and could also give some short term support for bulls.
This could lead to retesting the broken trendline while the first resiStance at around 60-61 which could a tough hurdle to the bulls given the stockpiles built up in 2018, following this a further drop probably in mid January/February will follow with new lows below 50 dollars to form the "c" wave. Given the stregth of lvl 50 the move below could be either just a spike or a bigger move well into the 40 dollar area.
However if the 60-61 zone will not hold, the next supply zones could be at 64-65 (double top neckline) and the strongest supply zone could that has to be broken by the bulls is 72-76. However this scenario is unlikely unless some extreme situations will occur.
This could lead to retesting the broken trendline while the first resiStance at around 60-61 which could a tough hurdle to the bulls given the stockpiles built up in 2018, following this a further drop probably in mid January/February will follow with new lows below 50 dollars to form the "c" wave. Given the stregth of lvl 50 the move below could be either just a spike or a bigger move well into the 40 dollar area.
However if the 60-61 zone will not hold, the next supply zones could be at 64-65 (double top neckline) and the strongest supply zone could that has to be broken by the bulls is 72-76. However this scenario is unlikely unless some extreme situations will occur.
Trade active:
Due to overall negative sentiment, increased US stock piles and fears of slowing demand growth all added to the sell off in the oil market today. The WTI spot market dropped below the psychological $50/b and there are now 2 possiblle scenarios:
1. The market will tomorrow drop further and we enter the trade with 2 units using stop limit to sell (@49.10/49.05) the january contract (CLF9) and we place a protective stop at 50.1 with targets 1st unit $47 2nd unit at $45. If the ifrst unit is reached we change are stop to a trailing one at entry, with trailing step 0.1$.
2. or we will wait for the retest of the 50$ resistance and sell there with limit and adding a stop loss at 50.65 target $48 and $45 as per scenario No.1.
If the market closes the week above $50/b it could be a false break and the idea is cancelled, all trades to be closed 5min before the market close
1. The market will tomorrow drop further and we enter the trade with 2 units using stop limit to sell (@49.10/49.05) the january contract (CLF9) and we place a protective stop at 50.1 with targets 1st unit $47 2nd unit at $45. If the ifrst unit is reached we change are stop to a trailing one at entry, with trailing step 0.1$.
2. or we will wait for the retest of the 50$ resistance and sell there with limit and adding a stop loss at 50.65 target $48 and $45 as per scenario No.1.
If the market closes the week above $50/b it could be a false break and the idea is cancelled, all trades to be closed 5min before the market close