Trade view /
12 January 2018 at 9:26 GMT
Oil prices continued to push higher on Thursday as expectations of a tightening market kept providing net support as US inventories declined to the lowest level in more than two years. A weaker US dollar was also a significant element providing support.
Overall, WTI pushed to fresh 3-year highs above $64.50/barrel, with Brent also at 3-year highs as the March contract challenged the $70.0/b resistance level.
This has resulted in a shooting star being posted on the daily chart and a bearish engulfing on the 4-hour chart and gives aggressive bears a rare opportunity to short the market. Furthermore, this could be the early stages of a short-term head-and-shoulders reversal (not yet formed).
The initial target for this move will be support at the $62.50/b area, but a strong word of warning: medium term trend remains bullish so a trailing stop should considered.
Entry: Sell at current levels ($63.42/b) and a rally to $63.70
Stop: Initially a break back above $64.20 but would advise a trailing stop
Target: $62.50 and $61.80
Time horizon: Intra-day
— Edited by John Acher
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