Sliding Oil On Tariff Threats Equals More Profits

Trump’s tariff threat hasn’t served oil prices well. They folded like a cheap suit. While they’re rebounding today, the decline could very well be far from over. How likely is that? Let’s find out.

We’ll take a closer look at the chart below (chart courtesy of www.stooq.com ).

On Wednesday, crude oil futures invalidated the earlier tiny intraday breakout above the 61.8% Fibonacci retracement (based on the decline from July highs to July lows, as marked in our yesterday Alert’s chart) and finished the day below it.

Black gold has gapped lower yesterday, triggering a sharp move to the downside.  This has made our newly opened position immediately profitable.

Thanks to yesterday’s waterfall decline, crude oil futures not only broke below the mid-July lows, but also below the green gap created on July 20. As a result, the oil bulls lost an important support.

Earlier today, the futures opened with a green gap. While that’s bullish on the surface, let’s

consider the following factors.  The magnitude of yesterday’s slide, the position of the daily indicators (Stochastic Oscillator has renewed its sell signal) and the size of today’s rebound, lead us to the conclusion that one more attempt to move lower, aiming to retest yesterday’s low as a minimum is ahead of us.

What could happen if the bears push the futures below it? Then, their first downside target will be around $53.50, where the June 19 low is. However, if it is broken, the sellers could test the lower border of the red declining trend channel in the coming week (currently at around $53).

Summing up, crude oil’s slide yesterday has pushed through an important support and today’s recovery efforts can’t compare to the preceding plunge. Further move to the downside is supported by the reissued sell signal of Stochastic Oscillator. Keeping the profitable short position open is therefore warranted.

If you enjoyed the above analysis and would like to receive daily premium follow-ups, we encourage you to sign up for our Oil Trading Alerts to also benefit from the trading action we describe. Check more of our free articles on our website, including this one (it covers the upcoming targets in the bears’ sights) – just drop by and have a look. We encourage you to sign up for our daily newsletter, too - it's free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to our premium daily Gold & Silver Trading Alerts. On top, you’ll also get 7 days of instant email notifications the moment a new Signal is posted, bringing our Day Trading Signals at your fingertips. Sign up for the free newsletter today!

Nadia Simmons

Forex & Oil Trading Strategist

Sunshine Profits - Tools for Effective Gold & Silver Investments

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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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