The November WTI crude oil futures market has been showing considerable strength over the past 24 hours. Monday’s session brought an explosive breakout to the bull on heavy volumes. My colleague Arslan outlined the likely reasons for this break in his update earlier in the session.

For now, participation is leaning towards the bear. A possible regression towards last week’s compression zone of $51.00 to $50.00 may be in the near future.

How About Some Early Session Scalps?

If you have read any of my pieces over the past few months, you will remember that I am a big fan of the scalping methodology. Playing a liquid market, such as WTI crude, in a tight fashion can often bring fast profits and limited risk.

Let’s take a look at a few setups for today.

November WTI Crude Oil Futures, Daily Chart

As of now, we have seen a failed auction above Monday’s high. Here are a few solid areas to get long for the U.S. session:

• Long from the 38% Fibonacci retracement level of $51.56

• Long from the 62% Fibonacci retracement level of $51.11

These two trades should be executed with at least a 1:1 ratio looking for 10-15 ticks. Both are attractive due to the location of the Fibonacci numbers in respects to Monday’s range. The round values of $51.50 and $51.00 serve as natural stop-out points for both scalps.

Remember: Time of day will be a key to the success of both trades. There is a very good chance that they will go during the first half of the U.S. session. In the event that sellers are too dominant, our modest profit targets give us a solid shot at success.