WTI Crude Oil Mid Session Brief:Compression - Forex News by FX Leaders

WTI Crude Oil Mid Session Brief:Compression

Posted Friday, August 25, 2017 by
Shain Vernier • 1 min read

October WTI crude oil futures are trading in a tight 52 tick range. Thus far consolidation has ruled the day and entire week for that matter. Currently, the market is under heavy compression rotating between $47.50-90. Let's see if there is a trade setup for later in the session.

Technicals

Trading rotational crude oil markets can be tough. Breakouts can come out of nowhere, wrecking the soundest of trades. Below is the outlook for October WTI on the daily timeframe:

CL Daily ChartOctober WTI Crude Oil Futures- Compression

It has been a bit of a surprise that this week’s crude market has traded sideways. After the volatilities seen during last Friday’s rollover, I was optimistic that there was an upcoming trend to get in on. No such luck.

A few support and resistance levels:

  • R1 $48.00 Bollinger Band MP

  • R2 $48.05 20 Day EMA

  • R3 $48.93 62% Retracement of current daily wave

  • S1 $47.06 Thursday’s session low

  • S2 $46.62 Last Week’s swing low

The daily chart gives us considerable topside resistance for this market with little support. For now, this looks to be a stagnant market.

Possible Trades: I don’t see a whole lot in this market that knocks my socks off. Scalp sells from the topside resistance levels are possibilities as is a fast sell under Thursday’s low.

A high probability trade is a sell from the resistance area of $47.99- $48.05. Convergence of indicators is always a bonus and this is a cheap way to play a market stuck in rotation. A 1:1 reward risk ratio with a moderate profit target is the best way to proceed in these conditions.

As always, be smart and trade for tomorrow!

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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