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 TopWTI 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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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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