Certainly, the last few weeks saw a luscious and stable rally in crude oil that stopped scarcely before the year high. Today, I’d like to share with you my present thoughts on oil plus suggesting a sell-short idea with narrow stop-loss that looks very profitable.
Let me also show you what we were watching, using current crude charts and current valid GUNNER24 Setups in the different time frames.
==> GUNNER24 has been short crude oil since Thursday, with a short-term downtarget at 47.22$.
Dear GUNNER24 Traders,
The 1:3 Trade: Sell US Crude Oil at 50.70
Our 1:3 trades are A) adjusted to a longer term, having a spacious stop-loss for the development not to be endangered and B) have to show a risk-reward ratio of more than 1:3.
On 11th of February at 26.05$ US Crude Oil (WTI) found its year low at # 1 and started a strong uptrend. This first monthly uptrend cycle stalled after a textbook 21 Fib number advance in weekly time frame and a classic 5 month first initial up impulse at absolute year 2016 high on 06/09 at 51.67$. Then market corrected for the summer low, followed by next strong rally that pierced dominating yearly resistance 3 days ago:
The first 5 month up impulse defined future important Blue Arc resistance. Cause current year high is defined Blue Arc, this threshold is resistance in yearly time frame. Of course Blue Arc is also a resistance in the monthly time frame. Blue Arc is precisely at 50.58$ for current month of October = # 9 of uptrend.
Crude shows visible reaction to the Blue Arc cause now below the yearly resistance arc. There is danger of important double top pattern in the monthly time frame.
==> October high is small lower high than current absolute 2016 high. 51.60$ vs. 51.67$.
October # 9-high nailed also a weekly resistance magnet and a natural lower line arc resistance, which is always important target for a market:
Current trading week is week # 36 of 2016 uptrend. Week is close to 34 Fib turn number. The week high has once again tested a Resistance Angle from below. We count now two week highs in row at Resistance Angle. See light and dark red arrow for the tests. And as mentioned a few lines above the oil reached lower line of 2nd double arc at month high.
Week candle also shows reaction to that weekly resistance magnet cause candle has a relative long upper tail, which points to up exhaustion for now.
==> Crude Oil reached monthly + yearly + weekly resistance magnet at October highs and could have stalled. If true that pullback is underway obvious backtest target is the 1*1 Bull Market Support Angle that was tested positively several times during summer. See the green arrows for that tests.
Within setup above I emphasized a 47.22$ sell target = downtarget for the crude. Shortterm downtarget is located at the 1*1 Bull Market Angle for the trading week 05-09 of November... US Presidential Election is on 8th...
Elaboration of Sell-Limit and shortterm downtarget with help of daily time frame and the dominating daily GUNNER24 Up Setup
Do you remember this next chart?! The last time I presented and analyzed that daily 5 Candle up was on 08/09/2016. The setup starts at the final low of 2016:
Then we wished to try a long at 41.40$ for a 50.00$ target cause the 4th resistance = former dominating arc resistance in the yearly was finally overcome. 50$ uptarget was expected to be worked off at end of setup according time.
See what has happened since in the daily time frame:
The likely very important 51.60$ month and week and small lower 2016 high accurately has arrived at end of GUNNER24 Setup according time factor. Crude began to decline once time support of setup has ended.
So setup above signals at least the start of a pullback/consolidation period/cycle in the daily time frame. Cause of double top danger and cause October high was made at combined weekly + monthly + yearly resistance magnet also a very deep retracement is possible. Maybe even the yearly trend has changed at October highs!
At first step, we should just expect a pullback/minor decline underway. Think the green dotted Daily Support is the most reliable target for the awaited pullback/daily down cycle. Interestingly the Daily Support is at 47.22$ for 8th of November, the US election date. Daily Support and 1*1 Bull Market Angle in the weekly time frame get married at 47.22$ shortterm downtarget on 11/08/2016.
==> Shortterm downtarget at 47.22$.
Very strongest daily resistance is obviously the red dotted 50.73$-GUNNER24 Horizontal. This horizontal resistance is more or less equal to the Blue Arc yearly and monthly main resistance for October 2016. Blue Arc main resistance is at 50.58$ for October.
==> We sell a possible and allowed next US Crude Oil (WTI) test of the daily horizontal resistance horizontal till Tuesday, 18th of October. Our 1:3-Sell-Short limit is placed at 50.70$!
==> Shortterm downtarget is usually strong 1*1 Bull Market Angle in the weekly time frame at 47.22$. Target additionally is at the daily uptrend support for 7th, 8th of November 2016.
==> Please place SL for the trade setup 1 Cent above October high at 51.61$.
Risk = 0.91$. Potential reward = 3.48$. Risk-reward ratio 0.91/3.48 or 1:3.82
Please use ETF, options, CFDs or warrants reproducing this trade. Sell when CLX6 Crude Oil (WTI) November 2016 contract trades at 50.70$!
GUNNER24 Trade of the Day order for 10/13/2016:
Market: US Crude Oil (WTI)
Orders: Sell-Limit at 50.70. Stop-Loss (SL) at 51.61. Sell-Limit order valid 10/18/2016. Shortterm downtarget at 47.22.