Oil Short Setup

OIL Weekly Analysis (Short)

Currently price is in the upper part of an ascending channel, approaching a downtrend line. There's confluence of three levels here - the descending trendline, the ascending trendline of the current channel and a resistance level.

I am looking for a short position in the $78-$79 area with a relatively tight stop loss slightly above $80. If price does break out from the downtrend line, then the last thing I would like is to short it.

Target is set at the lower trendline in the ascending channel, somewhere around $72, depending on the time it will take the price to retrace back down.

This analysis goes along with the one about SPX500 , which I just posted. Since there's high correlation and I expect a retracement there, too, I believe we are about to see a pullback.