Bulls of Crude Oil Fear a Reversal
Arslan Butt • 1 min read
Yesterday, the crude oil soared more than 100 pips to trade at $48.11 after the release of bullish remarks from Iranian Oil Minister Bijan Zanganeh. He commented that a supply cut agreement is expected to be extended, but it requires more time to discuss the final details. You must be wondering, what's the point behind a bullish oil?
The main point is uncertainty. It's as if, if I'm worried about the mixed sentiments regarding prices, I will try to purchase now to avoid fluctuations in the variable cost. Besides, Iran is 4th number in the list of countries with the biggest oil reserves. We can’t take it lightly.
Crude Oil Hourly Chart
Looking at the technical side in the 4-hour chart, we can see a triple bottom support level at $47.03. Moreover, a bullish engulfing pattern above the support level of $47.03 increases buyer confidence.
However, at this moment the crude oil is trading right below a major triple top resistance level of $48.30. Aside from the triple top pattern, we also see 50 period EMA blocking its way.
Trading Signal: Traders, considering the thin volatility, I have just added a buy position at $48.07, with a tight stop loss of 47.90 and a take profit of 48.30.