Crude Oil – Looking for an extended correction

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Crude Oil_WTI_0106

Crude Oil – Looking for an extended correction

(WTI) US Oil

Monthly: Trading close to the bottom of a bullish channel formation. Trend line support is located at 64.00 with previous swing low at 63.57. Bearish dark cloud candle posted. Reverse head & shoulders formation looks to have completed. Selling pressure from 75.24 has resulted in prices targeting a new 4-month low.

Weekly:  Trading close to the end of an ending wedge formation. Price action formed evening doji star formation, often an indication that the bullish trend is over or we should see at least a sustained correction to the downside. 7 out of the last 8 weeks have seen negative price action. Plenty of room for a correction without impacting on the long-term bullish bias.

Daily: Price action has formed a bearish flag with prices now extending lower and the measured move target is 62.00. The 161.8% Fibonacci extension is located at 61.95. Further downside is expected, although we prefer to set shorts on a rally for better risk/reward conditions.

Action:

We look to Sell at 67.00

Stop: 68.50

Targets: 63.60 and 62.00

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Steve has traded and analysed financial markets for over 30 years. He started on the Baltic Exchange with Cargill Investor Services in 1987 trading Commodities. Following this Steve went on to work in a number of senior trading roles on LIFFE. From 1995, Steve then traded his own account, specializing in European Fixed Income markets. For many years he ran his own proprietary trading company, facilitating and educating traders. In 2012 he joined PIA-First and assisted in restructuring the company and help build it into one of the UK’s leading, award-winning independent research houses.

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Steve has traded and analysed financial markets for over 30 years. He started on the Baltic Exchange with Cargill Investor Services in 1987 trading Commodities. Following this Steve went on to work in a number of senior trading roles on LIFFE. From 1995, Steve then traded his own account, specializing in European Fixed Income markets. For many years he ran his own proprietary trading company, facilitating and educating traders. In 2012 he joined PIA-First and assisted in restructuring the company and help build it into one of the UK’s leading, award-winning independent research houses.

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