Price action behaviour, although still within the ranging within the levels 1240 (key support) and 1320 (resistance), is showing bearish signs with a few rejection candles and closes below 1312 at the uppermost resistance zone (~1312 - 1320) before sinking further producing a new low below the 1280 support area. After a modest burst of downward momentum, it would be fair to assume a temporary pullback, given the bullish reversal bar of Friday's close (22nd August 2014), perhaps to the previous structure of resistance (~1293) which falls between the 0.382 Fibonacci retracement level and 0.5 retracement level, clearly closer still to the 0.382 Fibonacci level. If price is to perform this pullback, it would be important to look for bearish continuation signs (high test/shooting star/inverted candle) within this area. However, looking at Friday's bullish reversal candle as a very shallow pullback, and Monday's bearish reversal candle, and inside candle close below 1280 also offers a shorting opportunity. Depending on how/when this commodity is shorted and price action plays out the target remains at key support at 1240. There is healthy convergence on both Stochastic and RSI, with the caveat that a reversal is due from oversold territory.
In summary:
Case 1: wait for pullback to1293 and look to short
Case 2: short today's inside candle close for potentially aggressive sell off to 1240 with either stop above the mother candle or conservatively above 1293.
In summary:
Case 1: wait for pullback to1293 and look to short
Case 2: short today's inside candle close for potentially aggressive sell off to 1240 with either stop above the mother candle or conservatively above 1293.
