Reversal! WTI Crude Oil Futures Nearing Key Resistance Area-Get Ready To Short $47.46 - Forex News by FX Leaders

Reversal! WTI Crude Oil Futures Nearing Key Resistance Area-Get Ready To Short $47.46

Posted Thursday, August 31, 2017 by
Shain Vernier • 1 min read

The bulls are in firm control of today’s October WTI crude oil futures market. After a test under Wednesday’s low on the electronic open, we have seen a $1.20 rally. This rally may produce a great shorting opportunity.

I mentioned yesterday that the conventional wisdom towards crude oil values after Harvey may be a bit questionable. As precise reports begin to roll in on storage and refinery damage, this market will see even heavier participation. That can be a great thing for us traders.

Technicals

The intraday time frames have October WTI crude oil trend day up. However, the daily chart gives us an affordable area to take a short.

Crude Oil Daily ChartDaily October WTI Crude Oil Futures-Nearing Topside Resistance

We have a defined resistance zone from $47.46 to $47.60. This area should attract sellers. Here is why:

  • 38% of August’s range at $47.46

  • Round number $47.50

  • Bollinger MP at  $47.59

  • 20 Day EMA currently at $47.57

Bottom line: I like it when we have many technical indicators sharing a common area. This market has already posted a daily range of 178 ticks and is a bit overextended. Our defined resistance zone should bring sellers to the table.

The trade is fairly straightforward: Sell October WTI crude oil futures at $47.46 with a stop of $47.76. Employ a 1:1 reward risk. This is an affordable opportunity to rack 25+ ticks with an achievable R:R.

As always, stay within your means and trade smart!

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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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