WTI in a Downtrend. Sell, Don't Buy - 30 September 2014

The WTI Crude Oil markets fell initially during the session on Monday, but found support just below the $93.00 level in order to turn things back around and go much higher. We close above the $94.00 level, and as a result it looks as if there is still pretty significant support and bullish momentum. However, the $95.00 level above will be resistive, as it extends all the way to the $96.00 level. Because of that, I have no interest whatsoever in going long of this market, but I think that a resistant candle in that general vicinity would be an excellent selling opportunity as we are both in a downtrend, and are bit overextended at the moment.

The market looks as if it’s going to continue to consolidate between the $90.00 level, and the $96.00 level. With that, I think that there will be plenty of short-term trading opportunities, but it won’t be very easy to play this market or anything more than a short-term gain or loss. Ultimately, I think that we will probably sit here for a while.

Downtrend.

We are most certainly in a downtrend at this point time, so I am more comfortable selling than buying. But having said that, there are short-term buying opportunities time to time. You’ll notice that the highs here recently have got a little bit lower each time, so I think that the sellers will continue to have the upper hand overall, and with that I believe that $90 will be tested given enough time.

If we do break down below the $90 level, I think will go down to the $85 level given enough time. On the other hand, if we do manage to break above the $96 level, we will try to get to the $99 level next. Above there is the psychologically significant barrier of $100, which I would find a move above there as a trend changing event as it shows so much in the way of bullish momentum after falling so rapidly.

Crude Oil 93014

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.