USOIL fell below USD 100 as recession fears grew, fueling concerns that the economic slowdown would cut demand for petroleum products. In the macro trend, oil tends to be bearish. By the end of this year if the economy is heading into a recession. In a recession scenario with rising unemployment, bankruptcy of households and firms, commodities will chase a downward cost curve as costs deflate and margins turn negative to encourage supply curbs.
However, the decline in oil prices will actually benefit manufacturing companies. They will take cheap prices for supplies, after 2 quarters of prices soaring.
Looks like it worked. It had a bullish pin bar / hammer off of the lower channel and moved all the way to the top of the broken trend line.
DNP-FX
⋅
@kosai19, I totally agree with your candlestick views. You have great insight and experience with candlestick analysis, from the pinbar pattern we can take a position for a rebound. According to your view, can we take a short position for the next trade?
kosai19
⋅
@DNP-FX, Technically you can.... you have a bearish pin bar / inverted hammer at a known and reliable support level that was broken and is now acting as resistance (according to the pin bar that formed at the level). Trading candlesticks at key times increases odds.
kosai19
⋅
@kosai19, One thing worth mentioning. I don't like going against a trend. Candlesticks will fail more often going against the trend since the flow of money is against the bar. Candlesticks are just technical potentials. They show the activity of bulls/bears. In this case it's with the trend so it is more likely to work.
DNP-FX
⋅
@kosai19, it's true what you mentioned, we see the current price is back down to the rising demand area. the fundamentals that support technical this seem powerful. thanks for sharing your analysis and convinced some traders who followed this idea.