Trading position (short-term; our opinion): Short positions (with the stop-loss order at $68.15 and the initial downside target at $56.57) are justified from the risk/reward perspective.

Return to the starting point. In this way, we could briefly summarize the first quarter of 2018. Why? Because Friday’s session took crude oil to the levels that we saw at the end of January. Will the resistances, which triggered declines in the following weeks withstand the buying pressure in the coming days?

Let's take a look at the daily chart (charts courtesy of http://stockcharts.com).

Looking at the daily chart, we see that oil bulls took control shortly after the opening of the Friday session, which resulted in a fresh March peak. Thanks to this increase they erased the entire Thursday decline and climbed to the major resistance zone, which stopped light crude’s rally at the end of January, triggering declines in the following weeks.

Will history repeat itself once again and we see similar price action in the coming days?

As you see on the daily chart, the red resistance zone created by the previous 2018 peaks is currently reinforced by the upper border of the green rising trend channel, which suggests that reversal may be just around the corner – especially when we factor in the fact that the daily indicators increased to their overbought areas, which could translate into sell signals in the very near future.

If this is the case and black gold goes to the south from current levels, we’ll see (at least) a decline to the lower border of the green rising trend channel (currently around $61) in the coming days.

As always, we’ll keep you - our subscribers - informed should anything change, or should we see a confirmation/invalidation of the above.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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