Overview: A massive bearish storm has seen in the crude oil where last contract settled in negative first time in the history where most of the traders had bought it but all traders were wrong and they booked in loss. Well the bears are driving the car in the crude oil and the recent pull back rally was nothing but the profit booking.
Bears are leading and heading south side but recent buying was just a short recovery and bulls got a chance to test the moving average lines. Today at the time of writing crude oil is hovering at $14.66level which is negative sign for bears. Well the way bears are reacting it seems like they are heading south side and they will arrive at $9 very soon once again.
The momentum is with the bears and now we should also swim with the flow, which also suggests we sell crude oil. Odds are in favor of bears and we will keep our view bearish on the oil as long as $20 remains intact on a closing basis.
In our previous report also we mentioned to sell the crude oil near $30 for the target of $25 and $20 with the tight stop loss of $35 on a closing basis and our both targets have been achieved. so we are expecting that our readers must have made a profit from this move.
Fundamental analysis: –
The recovery in crude oil takes place from the lowest level in almost 30 years and also after more fiscal and monetary stimulus around the world. Equity prices in Wall Street are also seems weak for this week, adding more support to the bears. Despite the recovery, some analysts consider the price war could send prices even below the recent bottom. A quick recovery in equity markets could help prices stabilize in the short-term.
Technical Analysis: – A downtrend line is lying on the chart which is providing bearish signal itself and the way bears are reacting and taking the charge it seems like they are going to continue on the south side in this week also. This week also we will receive a monthly closing which may give us a new benchmark for history. RSI is flashing downside on the daily chart
The MACD is also favoring the bears for the time being.
On the hourly chart, the MACD and RSI both are providing us perfect sell signal which is a recent development and black gold is trading and sustaining
What next:- The $16.20 is the next resistance level followed by $18 level which is a strong support level whereas $13.00 is a key resistance level followed by $09.80 level.
Trade idea:- Investors and traders are advised to sell the crude oil near $15 for the target of $13 and $10 with the tight stop loss of $18 on closing basis.
