Here’s Something That Might Slow Oil Prices Down
- Posted by TheArmoTrader
- on February 21st, 2012
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.
$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.
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.blog comments powered by Disqus
Jerry Khachoyan is currently an undergraduate student at UCLA pursuing a degree in Political Science. He started trading in September of 2008. He concentrates on using technical analysis and reading the tape to enter the best risk/reward trades. The stock market to him is one of the greatest inventions by man.
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