WTI Crude Oil Brief-Late U.S. Session Trading Plan

Posted Wednesday, October 25, 2017 by
Shain Vernier • 1 min read

The word of the day for WTI crude oil is definitely “rotation.” Amid the EIA inventories release, December crude oil futures have traded sideways within Tuesday’s range. Even the EIA number coming in positive and well above last week’s figure did not give this market direction. The 30-minute price bar from 10:30-11:00 AM EST showed a robust volume of over 90,000 contracts, yet only a 37 tick range.

Compression and rotation are the keys for the rest of the session. Let’s take a look at the technicals and see if we can scope out a trade or two.


WTI Crude Technical Outlook

As I write this, December WTI crude oil futures are threatening to extend the daily range to the bear.

WTI Crude Oil FuturesDecember WTI Crude Oil Futures, Daily Chart


I am inclined to trade a rotational strategy. If we see price extension to the downside, buying in from defined support levels is the way to play a return of price to the value area of the last four sessions:

  • Support (1), 20 Day EMA $51.52

  • Support (2), Bollinger MP $51.31

  • Support (3), Daily SMA     $51.10

The daily chart gives us a “whipsaw” trading formation, which can make Fibonacci retracements difficult to successfully execute. For now, these support levels are best for market entry.

Bottom Line: I will actively be scalping each support level to the long with a tight 1:1 R/R scenario looking for a profit target of 5-12 ticks.

In addition, a long 1:1 R/R position from the Daily SMA at $51.10-$51.15 with a stop below $50.90 is a good way to play a late-session return to the $51.50 area.

As always, trade smart and for tomorrow!

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