Don’t get bull trapped, likley to test channel resistance
We reckon the recent rallies in WTI crude is temporary and should not be deemed as a reversal for the previous trend, the technicals for this commodity still suggest sell indications as there are no confirmation from lagging indicators.
RSI on weekly signaling indecision to the daily price upswings, we would rather consider this as a continuation to the previous downtrend (currently RSI 14 trending at 33.8089).
While same is the case with the slow stochastic as it has approached below 20 levels but there is no convincing %K crossover (currently %D line at 15.5084 & %K line at 22.8804 while articulating), so overall we don't see any sort of strength in this commodity that can pull back from current levels.
Most importantly, we also observe the bearish journey has been moving in sloping channel, even if the current rallies extend we could foresee the maximum targets would be upper channel line resistance at around 32.88 (rejected today's highs) or even upto 33.23.
As per all time frames, the major trend being downtrend, even though the prices began bouncing from last 3-4 days, the current price is still well below 21DMA, while there is no confirmation from lagging indicators whether these upswings would prolong or not.
Trade tips: Crude futures
Light Sweet Crude Oil (WTI) futures and options are the world's most actively traded energy product. WTI plays an important role in managing risk in the energy sector worldwide because the contract has the most liquidity and most transparency.
So from current levels keeping speculation mindset we recommend shorting near month futures for target towards $30.49 levels again, however short term traders keep a strict stop loss at 33.23 levels. Thereby, we have attractive risk reward ratio.
If puts are overpriced relative to calls, the arbitrager would sell a naked put and offset it by buying a synthetic puts. Similarly, vice versa when you think calls are getting overpriced in relation to puts.
Arbitration can also be possible through box spreads where buying debit call spreads and debit put spreads for a risk-free returns.
RSI on weekly signaling indecision to the daily price upswings, we would rather consider this as a continuation to the previous downtrend (currently RSI 14 trending at 33.8089).
While same is the case with the slow stochastic as it has approached below 20 levels but there is no convincing %K crossover (currently %D line at 15.5084 & %K line at 22.8804 while articulating), so overall we don't see any sort of strength in this commodity that can pull back from current levels.
Most importantly, we also observe the bearish journey has been moving in sloping channel, even if the current rallies extend we could foresee the maximum targets would be upper channel line resistance at around 32.88 (rejected today's highs) or even upto 33.23.
As per all time frames, the major trend being downtrend, even though the prices began bouncing from last 3-4 days, the current price is still well below 21DMA, while there is no confirmation from lagging indicators whether these upswings would prolong or not.
Trade tips: Crude futures
Light Sweet Crude Oil (WTI) futures and options are the world's most actively traded energy product. WTI plays an important role in managing risk in the energy sector worldwide because the contract has the most liquidity and most transparency.
So from current levels keeping speculation mindset we recommend shorting near month futures for target towards $30.49 levels again, however short term traders keep a strict stop loss at 33.23 levels. Thereby, we have attractive risk reward ratio.
If puts are overpriced relative to calls, the arbitrager would sell a naked put and offset it by buying a synthetic puts. Similarly, vice versa when you think calls are getting overpriced in relation to puts.
Arbitration can also be possible through box spreads where buying debit call spreads and debit put spreads for a risk-free returns.
