Oil: Resumption of monthly downtrend?Oil is approaching an interesting juncture, after breaking the recent swing low, creating a reaction to the upside.
I have shorted oil from between 42 and 41, and added on the way down, but recently covered when approaching the low volume support zone in light blue.
I have added a quarterly speed line, connecting 2015's Q2's high with 2016's Q1 low, which has acted as resistance before, rejecting price at the recent top, as well as speed lines for the recent up and down swing in the daily chart.
If we look closely, we can detect that April 4th's bar, offers a nice resistance level to short against, which matches the speed line analysis I've conduced, and also, is favored by time at mode trend analysis.
We're trading below the uptrend mode, and despite finding bulls at a low volume support zone, it could very well be a short squeeze rally, and probably short lived.
If price enters my sell zone (the red box from March 31st to April 14th), we could enter short (or add to shorts in the money) with a stop loss above the 38 handle, or more conservatively, above 41.5. Target is 21.70 but monitor the support levels below.
Good luck if taking this trade.
Cheers,
Ivan Labrie.
