Oil Facing Double Top – Wait for the Signal!
Today, the black crack has been trading unchanged since this morning. It's stuck in a narrow range of $47 – $47.30. Once again, we made a good call in our trade for the crude oil and we managed to capture our share of the volatile product.
Overall, the WTI crude oil has a bullish sentiment which is due to the latest stockpile data. As I mentioned in my previous update, I recommended you make sure to follow the EIA inventories report. According to the Energy Information Administration (EIA) figures, the inventories counted a draw of about 4.73 million barrels following a draw of 7.6 million barrels last week. The draw didn't exceed the previous one, but compared to the API report, it was quite bullish.
WTI Crude Oil – Hourly Chart – Double Top
Now it's trading right below the double top resistance level of $47.30 and breakage above this level may open further room for buying until $47.85. The double top pattern signifies a high probability of bearish reversals. A bearish reversal is likely as the oil has already entered the overbought zone.
WTI Crude OIl – Trade Plan
I would like to enter the market now at $47.26 with a minor stop loss of 20 pips and a target of 40 pips. But, it is prudent to wait and monitor the upcoming fundamentals from Eurozone and U.S before taking positions.
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