Medium term
Trade view / 11 August 2017 at 7:37 GMT

Bears dominate volatile move in crude oil

Director / PIA-First Limited
United Kingdom
Instrument: OILUSSEP17
Price target: 45.50
Market price: 48.26

Weekly price action remains contained within the Ichimoku cloud, but after last weeks hanging man candle, the market could be set for a decent correction lower. (chart 1)

The daily chart highlights the break of crucial support, and with momentum sliding into negative territory, we expect an extended downside move to continue. (chart 2)

More recent price action has been broadly neutral, contained within a triangle formation and struggling to extend beyond the 78.6% Fibonacci retracement. This was disrupted yesterday in a high volatility move which saw bearish sentiment win over (chart 3)

Yesterday's bearish outside candle resulted in a near 4% drop in oil prices from the high. With the overnight price action breaking the previous low, we expect further downside after completion of the previous AB=CD formation.

We prefer to sell into rallies on an approach to $49.00/barrel.


Entry: Sell OILUSSEP17 in front of $49.00/barrel

Stop: A break above $50.40/b

Targets: $47.00 and $45.25

Time horizon: 4 weeks

Weekly chart highlighting hanging man candle (chart 1)
Source: SaxoTrader
Daily chart with prices stalling near 78.6 fib and momentum shift lower (chart 2)
Source: SaxoTrader

4-hour chart showing volatility break of triangle (chart 3)
Source: SaxoTrader 

— Edited by John Acher

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