WTI Crude Oil Trading Plan- Sept. 21, 2017

WTI crude oil has entered a compressional phase, with price tightening between $51.11 and $50.00. Is this the session WTI breaks directionally?

Today’s U.S. traditional pit open for crude (9:00 AM EST) has shown bullish action on exceptionally heavy volumes. With over 20,000 contracts traded in the first 15 minutes, this could shape up to be a great day to trade crude.

Technicals

As my colleague Arslan outlined earlier, WTI is currently trading sideways, preserving a bullish bias.

November WTI Crude Oil, Daily Chart

A few observations:

• The compression zone remains relevant. Wednesday’s FED release prompted a selloff from intraday highs to the value area.

• $50.00 has been a monster facing the November WTI contract. A proximity test was put in earlier in the session, the current intraday low at $50.07.

• Trade remains bullish, firmly above the 38% level of the current bull run.

Trading Plan: There are a bunch of trades on the table for today, all of which are 1:1 R/R scalps looking for a profit target of 10-15 ticks.

1. Longs from $50.05-$50.10. Stop loss at $49.94

2. Longs from 38% retracement of $49.77

3. Shorts from $50.94-$50.99, stop above swing high of $51.11

Bottom Line: This market is exhibiting heavy participation, and looks to be primed for a directional move. In the event that $50.00 is taken out, a trend day down is a possibility.

Scalping above $50.00 and off of the 38% Fibonacci retracement level is a solid strategy to grab a few ticks while mitigating risk. A sell near $51.00 is an affordable way to play rotation back into value.

As always, trade smart and for tomorrow!

ABOUT THE AUTHOR See More

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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