Oil Bulls Facing Some Challenge On The 23.60% Fib Level

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Avatar for rafaelken1989
1 year ago

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I have been reading a lot of news including rumors that Oil may resume its uptrend soon. I have some reliable sources but I will not share it here. Instead, I focus my attention on the charts and technicals like I normally do. I have to make my own ways of investigation through technical analysis.

I’m proud to say that I made a huge long call for Oil last year noting a potential price surge back to 3 digits, a hundred dollars, and it is realized the following year by February 2022. You may read that call through the link below.


Of course, we cannot be right all the time with our TAs but it does not matter, speculations are free and can be endless. Although, I’m vocally sharing my thoughts regarding Oil through my social accounts, I must write a new one for formality’s sake.

So here I am again back to the Oil after 9 months. Consider this article as an update to where I left but this time I look at the Oil’s price in mid-term view only.

In the last 7 weeks, Oil has been strongly exchanging hands in the lower Bollinger band’s territory. Just a small recap, yesterday’s dips were heavily bought by strong picking up of volumes across the faster timeframes. I want to add also that Oil printed a new weekly swing low and extended the weekly falling wedge pattern from Oil’s peak last March this year. That’s our reference point for this pattern and over time, the price may bound to create lowering highs and lowering lows as validation.

As much as possible, I try to keep this analysis simple and straight-forward. Like I mentioned earlier, I’m looking for a mid-term trade setup.

What caught my attention is Oil’s two fib retracement levels that are perfectly coincides the probable extension of the falling wedge. The two retracement levels are 23.60% and 38.20% respectively. I highly assess that if Oil’s going to consolidate, these levels will act as short-term range boundaries.

Without further ado, my mid-term trade plan for Oil will be a short to the obvious entry at the 23.60% fib. This time around, I will be short for Oil. Should price rejects, my take entry level at the 38.20% fib plays out. However, if price accepts, the bulls will push price back to the 3 digit levels and near the weekly middle band. That’s my stop loss over there and an overall risk:reward score of 2.286.

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Avatar for rafaelken1989
1 year ago