Short term
Trade view / 07 September 2016 at 12:36 GMT

#SaxoStrats. UPDATE: WTI rally extension called into doubt

Head of Commodity Strategy / Saxo Bank
Instrument: CLV6
Price target:
Market price:
Saxo Strats banner
After crude oil prices jumped on Monday, we introduced a trade idea on Tuesday to buy WTI on dips, but the retracement has gone deeper than hoped for, which weakens the basis for an extended rebound.

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
Pandorra Pandorra
Many thanks Ole for continuous support.
Looks like weaken dollar is our best friend on this bullish way, with some lagging.
Ole Hansen Ole Hansen
Indeed... the market will be nervous ahead of the weekly inventory report from API tonight followed by the EIA tomorrow.
Michael Liu Michael Liu
going high, just missed it
ajith ajith
Dear Ole what is ur target for WTI? my target 46.40 to 50
Ole Hansen Ole Hansen
That is my first target area as well. If you click on the link above you can see the original parameters
Ole Hansen Ole Hansen
Update to be published shortly: CLV6 has returned to the near the high from Monday and at the time of writing this the peak today has been $46.49 just one tick short of our first take profit level at $46.50. Let us go to market on this limit order and maintain the second target at $47.80 while raising the stop to $44.50, just below yesterday’s low.


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