Making Sense of the Narrow Trading Range in Oil
June 19, 2020 (Investorideas.com Newswire) We previously wrote that while it was tempting to bet on crude oil's prices due to their weakness, it was not a good idea from the risk to reward point of view, as black gold didn't invalidate the breakout above the early-March high. And it was definitely a good idea not to enter a short position then either - crude oil moved higher since that time.
At the moment of writing these words, crude oil is attempting to break above the previous highs after verifying the breakout above the 50% Fibonacci retracement level. It also bounced off the mid-March highs and the lower border of the price gap, in which it's currently trading.
Right now, crude oil is trying to break above the previous June highs, the upper border of the March price gap and the 61.8% Fibonacci retracement. If it manages to break above them, we will consider opening a long position.
Still, it seems more likely to us that this attempt to break higher will not be successful and that the price of black gold will tumble instead. It's not likely enough for us to open a short position at this time, though.
The breakout that was recently confirmed, was the comeback above the lower border of the previous trading channel, and the resistance that crude oil didn't break is provided by the mid-2016 and 2017 lows. The upper border of the price gap is also clear on the above chart, but we already discussed it previously.
Either way, it seems that the situation in crude oil is unclear at this time, but we expect it to clarify shortly.
Summing up, the short-term outlook for crude oil is currently too unclear to justify any trading positions, but the bearish case seems more likely than the bullish one at this time.
We encourage you to sign up for our daily newsletter - it's free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!
All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
This news is published on the Investorideas.com Newswire - a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com