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Crude Oil Target Zone Hit

CL (crude futures) hit the top of the target zone today & has been tapping on that level since. CL (or any crude oil proxy such as USO, OIL, DWTI or a UWTI short) could be closed here for a quick gain (my preferences) or one could lower stops to protect profits, if holding out for the bottom of the support zone.

Personally, I've taken profits as I was just looking for a quick counter-trend/pullback trade although I could see the possibility of a continued move down to the 34.15 area (if so, I'd still expect at least one substantial bounce before then). I'll also say that the R/R to remain short at this time starts to diminish rapidly with each tick lower, especially with the longer-term (daily & weekly charts) still bullish, another reason for taking the quick gains. CL/crude was an unofficial trade idea, originally posted in the trading room so this post and the previous associated posts on CL will not be moved to the Completed Trade category.

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Mar 15, 2016 10:46am|Categories: Gold & Commodities|Tags: , |3 Comments

3 Comments

  1. cem602 March 15, 2016 10:50 am at 10:50 am

    Thank you for the update Randy!

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  2. miran1 March 15, 2016 11:36 am at 11:36 am

    Sorry Randy, a little bit confused with myself. Do you see UWTI will start to recover and DWTI will go down?

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    • rsotc March 15, 2016 12:47 pm at 12:47 pm

      miran1 Good question. To clarify or expand upon those earlier comments on crude oil, I am leaning slightly towards more downside in the coming days to anywhere from the bottom of the support zone on CL (35.44) & possibly as low as the 34.15 area. However, my confidence on a continued move lower isn’t very high & the odds for a bounce (even if it will only be relatively mild in scope & duration) start to rise sharply here at the top of the resistance zone. Therefore, I don’t feel that the R/R to remain short was worth the risk of a reversal in crude, especially as this pullback could possible be all that we get. As such, I booked full profits (a UTWI short taken while CL & USO were near the top of the wedge a few days ago). Bottom line is that I don’t have a very strong opinion right now as to the next direction in crude. The main reason for this update was to highlight the fact that CL/crude had fallen to the top of that aforementioned support zone/unofficial price target, in case others that were short wanted to book partial or full profits.

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