West Texas Crude Oil Long COT and Technical Analysis
West Texas Crude Oil Long
Price has come back up to the important psychological level of 79.000.
We can see that previously this area has acted as strong resistance and support.
In August last year we saw price find support here before continuing upwards.
Since November last year we have seen it act as an area of resistance.
On last weeks close we had price finally break through after consolidating the past few weeks.
Non-Commercial traders, as can be seen through COT filings, are a majority long West Texas Crude Oil.
103,350 long positions are currently held by Non-Coms vs 53,597 shorts.
Commercial Traders, who are in most cases contrarian to price, are relatively even.
This should be taken into account when using COT for conformation.
Geopolitical factors need to be considered. I prefer to leave these out of analysis as much as I can due to unintentional bias that comes with them, and the difficulty of quantifying them. However, when it comes to something like Oil, they often have to be at the forefront of analysis.
The current Israel-Hamas conflict is one of the geopolitical factors at play here. While Israel has no dominant position in the Oil industry, Hamas links to Iran have created the possibility that the USA may harden its sanctions against Iran, the 4th largest Oil producer.
The conflict against the Houthis is a major factor here. There is a concern these strikes will spill over and expand into a larger region wide conflict, heavily affecting the shipment, and therefore the price of Oil. Houthi links to Iran are also a concern, just as with the Israel-Hamas conflict.
I will most likely take a position on Monday 50% of my usual size. If we can get a retest of 79.000 I will enter another 50% of my usual size. Holding this trade long-term, and moving my SL to follow new swing lows, is my current trade plan. If the two conflicts begin to cool however, it may be a good idea to look at closing my positions.
If peace talks do commence for these conflicts, we will see Oil fall, but if the peace talks again amount to nothing, this would be a good opportunity to increase my position.
Price has come back up to the important psychological level of 79.000.
We can see that previously this area has acted as strong resistance and support.
In August last year we saw price find support here before continuing upwards.
Since November last year we have seen it act as an area of resistance.
On last weeks close we had price finally break through after consolidating the past few weeks.
Non-Commercial traders, as can be seen through COT filings, are a majority long West Texas Crude Oil.
103,350 long positions are currently held by Non-Coms vs 53,597 shorts.
Commercial Traders, who are in most cases contrarian to price, are relatively even.
This should be taken into account when using COT for conformation.
Geopolitical factors need to be considered. I prefer to leave these out of analysis as much as I can due to unintentional bias that comes with them, and the difficulty of quantifying them. However, when it comes to something like Oil, they often have to be at the forefront of analysis.
The current Israel-Hamas conflict is one of the geopolitical factors at play here. While Israel has no dominant position in the Oil industry, Hamas links to Iran have created the possibility that the USA may harden its sanctions against Iran, the 4th largest Oil producer.
The conflict against the Houthis is a major factor here. There is a concern these strikes will spill over and expand into a larger region wide conflict, heavily affecting the shipment, and therefore the price of Oil. Houthi links to Iran are also a concern, just as with the Israel-Hamas conflict.
I will most likely take a position on Monday 50% of my usual size. If we can get a retest of 79.000 I will enter another 50% of my usual size. Holding this trade long-term, and moving my SL to follow new swing lows, is my current trade plan. If the two conflicts begin to cool however, it may be a good idea to look at closing my positions.
If peace talks do commence for these conflicts, we will see Oil fall, but if the peace talks again amount to nothing, this would be a good opportunity to increase my position.
Trade active:
Entered in Long with SL at 77.188, swing low on the 4h chart.