Short term
Trade view / 30 September 2016 at 9:43 GMT

A trilogy of trades to cap off Q3

Trader / Saxo Capital Markets Pte Ltd
Instrument: CLX6
Price target:
Market price:
Background: Light sweet crude

Oil prices jumped on September 28 on news of a sideline Opec deal in Algiers but the rally may prove to be short-lived. 

Price action today in Asia was muted and capped within a $0.30 range as the price tests the 100-day simple moving average at $47.6/b, which capped the gains seen in oil just three weeks ago on September 9.

The %K line of the Stochastics (10,3,3) has now moved into overbought territory and we anticipate a bearish crossover in the coming days should oil prices turn to the downside. 

The Ccommodity channel index currently reads at 131.95, again putting prices in overbought territory. The CCI has performed well as a leading indicator of the decline in light sweet crude oil in June and August of this year.


Entry: sell CLX6 at 0.5 ATR from market, i.e. 47.17 – 0.5(1.64) = 46.35, GTC
(CLX6 = Light Sweet Crude Oil (WTI) – Nov 2016).

Stop: one average true range away, i.e. 46.35 + 1(1.64) = 48.00.

Target: $43.04/b , the 76.4% Fibonacci retracement of the move from the August lows to the August highs.

Timeframe: two to three weeks.

Risk/reward ratio: 2.01.

Slide 1

Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 

Background: USDNOK

A related trade to crude oil would be to buy USDNOK.

USDNOK bounced off the all-important psychological support of 8.00 on September 29 and has continued to rally today.

The %K line of the Stochastics (10,3,3) has now moved into oversold territory.

The pair seems to be capped by the 75-day simple moving average, which we can use as our take-profit level. The 75-day SMA stands at 8.3155 today.


Entry: Buy USDNOK at market, 8.0438.

Stop: 7.9680, just below the May 2016 lows.

Target: 8.3155.

Timeframe: two to three weeks.

Risk/reward ratio: 3.58.

Slide 2
Source: Saxo Bank  

Background: AUDNZD

We have seen AUDNZD rally some 3.5% since the middle of September.

The price action today has given up all of Wednesday’s gains, suggesting that the initial breakout of the downward-sloping trendline resistance may be a false break.

Stochastics (10,3,3) had a bearish crossover on September 27 in overbought territory, indicating that the upside momentum has declined.


Entry: sell AUDNZD at 1.0483 on re-entry into the down channel.

Stop: one ATR away, i.e. 1.0483 + 1(0.0077) = 1.0560.

Target: 1.0236, the low of 15 September 2016, or when the stochastics next exhibit a bullish crossover – whichever is earlier.

Timeframe: two to four weeks.

Risk/reward ratio: 3.21.

Slide 3
Source: Saxo Bank   

— Edited by Michael McKenna

For more on forex click here; for commodities, click here.

Non-independent investment research disclaimer applies. Read more
Thanks Edmund. Great stuff, as always!
Edmund Liu Edmund Liu
Thank you for the support AMIB
Crispee Crispee
technically CL and EURNOK still look attractive but closing in on ur stops so wondering your thoughts now?
Crispee Crispee
John Roberti John Roberti
Fundamentally, I agree that oil has to go down in the next weeks but today I did not follow because I wad afraid of short covering for month end! (and apparently it did happen) Let's see what will happen on Monday
Edmund Liu Edmund Liu
Dear John, thank you for your comment. Well yes it seems shortly after I posted oil prices started to move up. Which is why I placed the sell entry order below the market as a matter of conservatism. I do believe it is becoming at attractive short opportunity next week. Good luck
Edmund Liu Edmund Liu
Dear Crispee, thank you for your comment. For USDNOK looking at the intraday chart it seems it is still well supported at 7.9800, having tested this support 5 times in the last 2 hours. So it may still be an opportunity to go long at current levels (7.9880). Stop 1 ATR (0.0916) away @ 7.8964. Good luck : )
ajith ajith
I think we can sell two crude in the range 48 $ to 48.30$ with stop loss just above 50$. For a target of 45$ and 43$
Edmund Liu Edmund Liu
Dear Ajith, sure that is possible as well, i.e. to sell at the current levels. Alternatively would be to sell only after prices have broken down


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail