Oil Drop Short Position

6 Mei

Greetings Traders this is my idea on Oil and it is a Long shot for a Short.

This is my explanation:

On the 4H chart of WTI crude oil, we can observe a well-defined downtrend that began near the $72.50 level. After a sharp sell-off, price entered a brief accumulation phase and has now pulled back into a previous support zone — now acting as resistance — offering a prime opportunity for trend continuation.

🔑 Key Technical Zones:
🟥 Beginning of a Downtrend: Around $72.50 – local top and start of bearish momentum.

🟧 Breakdown Zone: Around $59.00 – key support turned resistance after a strong breakdown.

🟦 Accumulation Zone: Around $62.00–64.00 – consolidation phase before continuing lower.

✅ Retracement Area (Green Box): Around $60.00–60.25 – previous support now acting as resistance; ideal zone to re-enter short.

🔵 Target Zone: $53.30 – projected next support level and target for the short position.

🎯 Active Short Position:
Entry: $60.00

Stop Loss: $61.20 (above retracement zone)

Take Profit: $53.30

Risk/Reward Ratio: ~1:4.5

After a confirmed bearish structure, price pulled back into the retracement area, which previously acted as support. This area is now likely to serve as resistance, and price rejection here aligns with a high-probability trend continuation trade.

The target for the short is set at $53.30, which corresponds with the previous swing low, while the stop loss is positioned safely above the rejection zone to avoid false breakouts.

📈 Conclusion:
This setup reflects a textbook lower high formation within a strong downtrend, offering a clean structure and favorable risk-to-reward ratio. Watching closely for bearish confirmations within the retracement zone to validate momentum continuation.


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6 Mei

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