On the , this energy commodity forms a pattern (see rectangular area), and attempts to head towards neckline, the current prices well below DMAs, heading for next support at 46.50.
If it manages to break 47.97 (i.e. neckline of a ) then bears would be exposed to more momentum in the days to come.
The recent rallies have been testing resistance at 7DMAs (around 48.30 levels) (see 1 hourly chart).
While plotting weekly graph, "Shooting star" appeared at peaks of 48.93 levels that signals some weakness as the leading oscillators diverge to the previous rallies at that juncture.
Daily and oscillators converge to the prevailing slumps and evidencing consistent lower lows.
Current prices on monthly plotting slid well below EMAs as well, leading and lagging indicators converge prevailing slumps.
While, %D crossover sustains even at around 60 levels on slow (currently %D line at 67.3722 & %K line at 51.7462), so overall we see selling pressures in this commodity at the current stage of crude trading at 48.18 levels.
At current juncture contemplating above indications, on speculative grounds we recommend staying short in near month for target towards $46.50 level with strict SL of 49.20 levels.
Writers in a contract are expected to post performance bond margins in order to open and maintain a short position.
These margin requirements are determined by the exchanges and would usually be ranging from 2 to 10% of the full value of the contract.