Trade view /
07 September 2016 at 12:36 GMT
The dip in the market yesterday extended beyond the 61.8% retracement at $44.35/barrel that we were looking for. Instead the market only bounced — and this time helped by a weaker US dollar — after touching $43.84/b which was the 76.4% retracement.
Retracing so deeply before bouncing does not create the strongest foundation for the rally to extend. On the other hand, the market may be losing its appetite for selling considering the ongoing barrage of comments from various oil producers. Yesterday, the selling in the market picked up once US traders stepped in, and today we are seeing a repeat of that behaviour.
Traders may opt to raise the stop (initially set at $42.90/b) to entry ($44.40/b) and wait for a better entry level.
— Edited by John Acher
Non-independent investment research disclaimer applies. Read more