Here’s Something That Might Slow Oil Prices Down

WTI Crude Oil has been on a tear for the past 2 weeks. In fact, we are sitting at multi-month highs. A little over a week ago, I had a blog post talking about how crude had done nothing during this whole market run this year. I talked about how WTI crude oil could be at equilibrium at $100.

So it is time to have a small little fade play in WTI Crude oil? I think so. I think at 104.50-105, Crude can be faded back down to $100 for a quick play. But I’m not going solely on fundamentals. There’s an important major trendline that might slow oil prices down.

 

The Chart

$CL_F – Weekly

As you can see, Crude is pushing up against a major descending trendline. This area could give Crude oil trouble. I think a a short here at 104.50-105 with a stop above 106 is do-able. Target would be $100. This gives you about a 1:5 risk/reward setup.

Caveat: News from the middle east/Iran can always make oil pop or drop. Be aware of that if you are going to take this play.

 

Tags: $CL_F $USO $SCO $UCO $DTO

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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