Daniel.B
Short

Hear ye, hear ye oil traders!

FX:USOIL   Crude Oil (WTI)
787 30 7
Well as I'm getting to go to sleep I happen to check out crude price action on my phone and notice something very interesting. It seems as we have a potential descending triangle pattern developing in crude. New traders may be wondering what this may mean (if your a more novice trader you shouldn't be trading any commodities IMO lol but if you are well idk what to say). Anyhow, I attached a link on this post with a chart that has an explanation of what a descending triangle is, and what it means in regards to price action. Another technical perspective to keep in mind is the multiple price rejections at the 50% Fibonacci resistance level . So all in all, I'm not personally trading my view on crude oil             through the futures but through shorting leveraged oil             companies. That being said, I always keep my eye on what the crude futures are doing before the US open, and any interesting price action that may be forming indicating bearish bias on crude which as you may know benefits my short positions on lev. oil             companies.

What I would be looking for if I was trading crude would be for a break and close below the support level drawn out on the chart (roughly the $44.0 area). BTW I would be on the 1HR chart when looking for entry on a retracement back to the broken support turned new resistance. For those finding it difficult to find short entries in crude oil             , the 1hr chart works fabulous for finding entries on crude oil             . And if there is wide enough price ranges move up to the 4hr chart. This little piece of advice is geared towards swing traders not those looking to day trade crude.

Cheers, and hope you like the chart. =)

Rebounds

benangus2003
oil
benangus2003 about USOIL a year ago
Agreed on the descending triangle; however, Interest Rate Hike decision and Nuclear Deal decision both fall on September 17 (Please correct me if I'm wrong). Currently, on the hourly chart, a retest of 45-45.25 potentially a good place to short. This shows on the daily at 45.27.
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Daniel.B smitheric1970
a year ago
If I short it it'll be on a break below support, other than that its to risky for me personally... Just because of the large short interest on oil, it doesn't take much to get another large short squeeze rally.
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Yahia.Awes
a year ago
Bullflag?
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Daniel.B Yahia.Awes
a year ago
I don't see one... If you do feel free to post your chart showing the bullflag on here
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Yahia.Awes Daniel.B
a year ago
Pennant in uptrend normally is bullish.
+2 Reply
Daniel.B Yahia.Awes
a year ago
Oh yea I see what your saying, but from what I see oil is in a massive downtrend with a minor pullback (I just personally think it's to early to call the pullback an uptrend.). But I definitely respect your point of view on this. Thank you for your input Lighthouse! =)
+1 Reply
Yahia.Awes Daniel.B
a year ago
I don't know but that monthly hammer occured in 2009 and then it went to the sky....
+1 Reply
Daniel.B Yahia.Awes
a year ago
Your point is very, very valid. Although, when in regards to monthly candles we do tend to retest the lows on a short term basis... It did that also in 2009 (retested the lows after the monthly candle low). If I trade oil I'm much more of a shorter term trader (I don't like holding for more than 2 days), so my views are much shorter term hehe =) . Are you going to start entering "long" crude, as a long term investment and just roll the contracts as we go?
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Yahia.Awes Daniel.B
a year ago
This is my forecast, you could keep your short if it breaks down support it will plunge. If you see a reversal candlestick pattern, you know what to do.
Bull -> Bear -> Bull?..
+1 Reply
Yahia.Awes Yahia.Awes
a year ago
Exactly according to predictions.
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smitheric1970 PRO Yahia.Awes
a year ago
nicely dowe Lighhouse!
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Daniel.B Yahia.Awes
a year ago
Nice, congrats man! =)
+1 Reply
Yahia.Awes Daniel.B
a year ago
Thank you Daniel, pennant/flag in uptrend is a signal of consolidation and then you have to buy as much as you can ^ ^
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coolingla PRO
a year ago
Shorting oil at this level is penny wise, pound foolish.
+1 Reply
Daniel.B coolingla
a year ago
Then don't short it :)
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smitheric1970 PRO Daniel.B
a year ago
I think your break below 40, is right on the money, although I believe we are currently in a distribution area that will retrace to the 49 level. That being said, there is a ton of volatility during this distribution and again, your advice to look for the break below 40 will prove to be golden. Again, I love your charts Daniel, simplicity is beautiful!
snapshot
+1 Reply
Daniel.B smitheric1970
a year ago
Yea I totally agree with you, until we get a break below 40 its just to volatile to try to trade it ATM. Thanks for your chart post on here and your input! Definitely added value to this post! =)
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smitheric1970 PRO Daniel.B
a year ago
Thank you sir! Early 2009 accumulation (bottoming process in crude) is an interesting one to look at regarding crude's current price level. I believe that we will fall further then we did in 2009 and will undergo a much longer bottoming process; however, prices swung from 49 down to 35, 3 times in only 3 months.
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Daniel.B smitheric1970
a year ago
No prob Eric, you make very valid points backed by good analysis which is something I & other authors always appreciate here on T.V.! Yea this time around it can very well be a much longer bottoming process with fairly wide price ranges! =)
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jarrod.baker
a year ago
totally new to this but i think its fun. can i get some feedback on this?
snapshot
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Daniel.B jarrod.baker
a year ago
Hey how's it going Jarrod, you need to ask a more specific question so somebody can help you.
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jarrod.baker Daniel.B
a year ago
hmm... when you look at my chart, can you see my logic behind my analysis? Or are my lines drawn arbitrarily? Is your first thought when you look at this, "this guy is a damn fool, no idea what he's doing."
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smitheric1970 PRO jarrod.baker
a year ago
hahaha I call myself a damn fool whenever I make the wrong trade! Personally I think you are showing a similar descending triangle as Daniel but with an expected break to the upside. I would ask why you expect the upside target? Not arguing with it at all, just curious, Lighthouse has a bullish pennant view, although, if we do head back uphill there seemed to be a lot of distribution happening at the 49 area. This 35'ish to 49 range goes back years. I'd like to see another retrace up to 47-49 for another great shorting opportunity but personally don't think it will go any higher than 49.5. Right now it looks like prices are breaking down but I've added in a short term possibility chart of a fake below the triangle and back into the distribution range.
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+1 Reply
jarrod.baker smitheric1970
a year ago
I saw your defending triangle in May, more as a channel. Then from "the next support rising triangle. when that broke down, I took the initial pivot, and then the support from after the break down to draw a a bottom line. took the last high, right before the ascending triangle break down, and then the next little pullback to draw a top line. Extended them both and used their intersection as S/R. Also with the volume inside the current descending triangle, the volume is spiking at the top, indicates bears trying to bring it down. overall the volume is decreasing through the triangle, showing the bears are giving up, leaving room for the bulls to break above the resistance from the bears. I don't have volume on mine, but looking at yours.
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smitheric1970 PRO jarrod.baker
a year ago
Nicely done!
+1 Reply
jarrod.baker jarrod.baker
a year ago
wow, so many spelling/grammar errors: *descending, *"the next support"
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jarrod.baker jarrod.baker
a year ago
No fundamental reasons.
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Daniel.B jarrod.baker
a year ago
Nice discussion you guys got going on in here! haha To answer your question Jarrod I can see the reasoning behind your trend lines and triangle. But just in my experience in trading oil, when we get distribution (ie. forming triangles, etc) oil tends to break to the downside, and if it breaks to the upside of the triangle it only forms a horizontal channel for 1-3 weeks only to break lower on the channel, so me personally if the triangle breaks to the upside I would rather see a break and close above 48.00 (roughly the highs of this triangle), and even then I just don't go long oil I just wait for a deep retracement to look for short positions. And good analysis by the way, remember analysis doesn't have to be "correcct" in predicting where prices may go to be "good analysis" so if you are really new to this, don't get beat down when your analysis is incorrect. Because nobody gets it right 100% of the time, its just a business of probabilities and doing your best to get the odds in your favor, and mitigating your losses when you do have any. =) Once again, good analysis and reasoning behind it. =)
+1 Reply
jarrod.baker Daniel.B
a year ago
Thanks! I don't actually trade oil, honestly I don't fully understand how futures work. But I just like to use this for small cap Oil stocks ($PES), and ETFs ($UWTI) both did really well today :)
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Daniel.B jarrod.baker
a year ago
Ahhh i see! Yea I haven't personally traded oil for the most part this year.. I believe I only traded it two times at the beginning of the year but thats about it. Nice for the most part I'll traded $PXD and XLE this year. =)
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