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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!