WTI Oil – A technical buy?

WTI Oil – A technical buy?

Stephen W

I am a Technical Forex Trader & Analyst.

Trading the Forex markets on behalf of Samuel and Co Trading in Watford. I am a Technical Trader, here to take on the game and turn the sceptics into believers. Join my journey as I release weekly technical analysis and trade breakdowns – opening the floor to feedback and conversation. I look forward to engaging with you all.

I’m sticking with WTI Oil this week – Do we have another entry on its way?

WTI -Daily

Here’s a quick snapshot of last week’s short taken and closed on Oil. With price hitting my Profit Target 2 around $51.4.

Moving forward a week, to today, I’ve potentially found a new entry.

Let me break it down.

 

 

 

WTI – Weekly.

On the weekly timeframe I have highlighted a clear support and resistance zone that has been well respected since 2015 in this market ($50 – $51 value zone). As we get closer to the action, I’ll display some further confirmation that may give me the go ahead to trade.

WTI weekly

As you can see, last week formed a textbook weekly pin bar at this strong support/resistance zone ($50 – $51), along with a rejection of the 0.618 Fib – which is now beginning to suggest that price action is struggling to break this level and the sellers are losing strength.

On the daily timeframe to break down my potential entry.

Daily –

From my above criteria, I am now waiting on confirmation to enter a long position that fits my double bottom reversal strategy. So far, we have bullish RSI divergence with a bullish candle close yesterday, signalling the bears are running out of steam. Though, for me to enter I now need today’s daily candle (Friday 13 June) to close bullish and above Wednesday’s (11 June) bear candle. This will then meet my criteria for a double bottom entry to get involved on Monday’s daily open.

Upon this setup occurring – below I have displayed where my profit targets will be placed.

Daily targets

For my profit targets, I’ve drawn in a Fib retracement from the high to low on the daily chart and as per usual I’ll be looking at the 0.382 & 0.618 levels as my 2 profit targets. Anyone who’s been following my articles can probably tell I’m a big fan of using Fib retracement levels for entries & profit targets – as I find these levels are well respected throughout trading markets and Oil is no exception – you can see the 0.618 fib is sitting tightly to the psychological ‘whole’ number of $60. Of course this does not mean the market is certain to reach this level but even with my profit target 1 level at the 0.382 Fib, it’s sitting right at the $57 sup/res zone and psychological ‘whole’ value – showing clear confluence of these levels being previously respected and highly likely to be respected moving forward.

Upon a long entry position, I’d also place quite a tight stop loss just below last week’s lowest daily wick, reason being; the market has signalled to me (within my double bottom criteria) that price action is struggling to break this support level and the bulls may be coming in to take control, meaning I can be slightly more aggressive with my risk management.

  • Profit Target 1: $56.6 (0.382 Fib) – resulting in a 1:1 risk/reward
  • Profit Target 2: $60 (0.618 Fib) – resulting in a 2.3:1 risk/reward

If, however, we do not get confirmation to enter long after today’s daily close, I’ll be waiting on a downside breakthrough of the $50 level and for price to pullback and re-test the support now turned resistance. From here I’ll be waiting for my short entry criteria to be met and look to trade price action down towards the $45-$46 handle. If this is the case, I’ll be sure to keep you posted in next week’s article.

But for now, let’s see how this one plays out.

 

 

Thanks for your time today and as always, I look forward to your thoughts.

Disclaimer: Any statements non-factual in nature constitute only current opinions, which are subject to change. The information presented in this article is not a specific buy or sell recommendation and is presented solely for informational purposes only. Not to be taken as financial advice.

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