In our Daily Trade Watch, we take a look at some high probability trade setups that we look to trade over the course of the day. Today, we will be looking at Crude Oil having a potential bullish breakout.
Crude Oil in the Spotlight
As we look across the markets today, we can see that many of them are going through a period of indecision. They are experiencing a pullback from the highs or lows. However, one market is giving us the high probability technical setup that we like to trade. This being Crude Oil.
Of course, the Oil markets are fundamentally driven. This is because OPEC and JMMC decided to remove the supply restrictions put in place over a year ago. This would ordinarily cause the price of Crude Oil to fall. Instead, we saw a 10% increase in the price of oil in a 6 day period. The major reason for this bullish price action was due to dwindling stockpiles. Consequently, inventories were expected to be much lower by the year’s end.
Technical Analysis
Now, when we take a technical look at the Crude Oil market, we can clearly see the significant volatility over the last few weeks. This market peaked around the $75 level. Afterwards, it consolidated for more than a week before selling off aggressively over the next 5 days down to the $67 level. This is, of course, a 10% devaluation in a short period of time.
It is interesting to note that this $67 low is also a significant level of support in this market. It also runs into the 100 day moving average which will add more support to this market. So, what we are looking to do with the Crude Oil market is to look for opportunities to buy this market but only if we get a confirmed break above yesterdays high of $69.55. This may include a breakout trade or a pullback trade if the conditions for trading it are met.
In retrospect, we will continue to see some significant volatility in the Oil markets. So, as always, put a strong emphasis on calculating trade side and managing risk.
Crude Oil in Potential Bullish Breakout – Full Analysis
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