Although crude oil futures moved a bit higher yesterday, the major resistance zone created by three gaps and the 61.8% Fibonacci retracement again stopped the buyers. A pullback followed, and the futures invalidated the earlier breakout above the previous peaks.
Together with the key resistances just above, it suggests that reversal is just around the corner. This is especially so when we factor in yesterdays grey gap it continues to serve as an additional resistance.
On top of that, the daily chart reveals that crude oil futures opened today with another bearish gap, and that the bulls didnt manage to close it in the following hours.
Therefore, should the sellers push the futures lower from here, the first downside target would be Wednesdays green gap and the lower border of the rising green trend channel. The bears are on the move as black gold changes hands at around $57.80 currently.
Summing up, Wednesdays oil upswing generated no follow-through buying as the bulls havent yet again overcome the strong combination of resistances ahead. Its the 61.8% Fibonacci retracement, and the three gaps (pink, red and orange ones), now also supported by yesterdays grey gap. They have reliably stopped the bulls several times already, and the short position thus remains justified.
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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.