Before we summarize today’s Oil Trading Alert, we would like to draw your attention to the long-term XOI chart.
Taking into account the fact that crude oil and the oil stock index have moved in the same ditection recently, it seems that light crude will reach the long-term resistance line at the same time as the XOI the 2008 high. We might view this (both levels being reached simultaneously) as a confrimation that another local top is in or that at least a pause is likely.
Summing up, the most significant event of yesterday session is a confirmation of the breakout above the medium-term resistance line. As mentioned earlier, this is a strong bullish signal, which suggests that we will likely see further improvement in the coming days (despite the fact that we may see a pause around the nearest resistance zone).
- Very short-term outlook: bullish
- Short-term outlook: bullish
- MT outlook: mixed with bullish bias
- LT outlook: mixed
Trading position (short-term; our opinion): Crude oil confirmed the breakout above the medium-term resistance line and opening long positions at the following terms is a good idea. Stop-loss order for crude oil: $102.40, stop-loss order for WTI Crude Oil (CFD): $102.20. A price target for crude oil and the CFD: $108. We will keep you informed should anything change as far as our opinion is concerned, or should we see a confirmation/invalidation of the above. The above is not an investment / trading advice and please note that trading (especially using leveraged instruments such as futures or on the forex market) involves risk.