USOIL Short

27 Jun 2019

The price of oil is currently squeezed into the apex of a bearish rising wedge pattern and is beginning the implied breakdown. Negative divergences can be seen on the 1H, 2H, 3H and 4H chart whilst the PPO signal line is still negative on the 1D and 1W charts which shows the underlying bias is bearish. There are clear support levels below which I have found on the daily charts stretching back to the times mentioned. I see oil making a break right past the March 2005 level, however if it doesn't, it can act as support for a potential back test of the wedge's support line. Even if oil reclaims that level and puts in a new recent high, it would simply extend the divergences further and indicate a bigger drop. Given the market's outlook right now and how it has been correlated strongly with the price of oil, I see this as further evidence that we will see a significant breakdown in oil to at least the March 2009 support level.

For this trade, we will be using DWT (-3x USOIL).

29 Jun 2019

Dagangan aktif

The March 2005 support has been breached impulsively on high hourly volume (53.508k vs. 15.656k avg.) after the price action briefly formed an ascending price channel and back-tested the resistance of $59.59 (green horizontal line). From here, we expect a reaction of the price to either make a shallow recovery above the support-turned-resistance from March 2005 and creating a bear flag pattern, or continuing downwards towards March 2009 right away.

1 Jul 2019

Nota

The local resistance level shown as the green horizontal line has been briefly breached and then given up. The technical significance of this is that the resistance has been further validated as being significant AND the divergences mentioned have been extended, indicating further downside action.