Buying Lows Works in A Weak Pattern

Peterson

Summary:

Today's oscillation will start from 80.0 to 83.5, and it is better to buy at lows.

BUY WTI

Close Time

CLOSED

79.687

Entry Price

82.500

79.300

97.157 +2.183 +2.30%

38.7

Pips

Loss

79.300

Exit Price

79.687

Entry Price

82.500

Fundamentals

During Tuesday's (November 7th) Asian session, WTI crude oil oscillated narrowly, and it is currently trading at 80.3 dollars/bbl. Yesterday, WTI was too weak to rebound, but at least the decline eased, closing the daily chart slightly lower. It opened lower today due to a technical extension of decline, and bears and bulls are largely balanced. There was very little room for us to trade oil yesterday. It is possible that yesterday's market offered some opportunities for other investors, but it was not what we were looking for. It's like when you weave a big net with 2-finger-sized holes, then you are destined to just let go of the small fish that are smaller than 2 fingers. Thus, when choosing a trading system, you must give up a lot of opportunities that do not belong to you. For sure you may earn something from it, but this is not based on systematic trading, and those random gains will only weaken your executive force and destroy your trading logic. At present, neither bears nor bulls can overwhelm the other, and short sellers are still trading the slower demand in the major economies under the downward pressure of the economy. In the short term, the bears will dominate the market, but I still maintain the plan to go long at lows for the following reasons. Firstly, the U.S. plans to buy up to 3 million barrels of crude oil next January to supplement the SPR, and the current price is in the acceptable range of the United States. Thus, the downside space will be small. Secondly, the war is still ongoing. Although it is cooling, there is the possibility of large-scale outbreaks at any time, and the oil price is even possible to surge to 100 once the oil-producing countries participate in the war. Lastly, the OPEC+'s production cuts are valid. It did not end early as expected, and the oil price has come down from $94 to $80. I think the retracement is sufficient. Even though Saudi Arabia and Russia said on November 6th that they would continue the additional production cuts of 1.3 million barrels to the end of December, it won't affect much the outputs. Instead, their statement is more like a psychological factor to maintain the stability of the oil price. In addition, they aimed to remind the bears that the price would be stable soon because they are still cutting production.

Today's Focus: API crude oil inventory data, the Eurozone PPI, the U.S. trade account for September, and more importantly, speeches by Fed Chairman Powell and several Fed officials later.

Technical Analysis

Oil oscillated narrowly yesterday from 80.5 to 82. It showed a big oscillating range, while the trading space for us was limited. Besides, the daily chart closed with a doji star that has a long upper shadow, indicating balanced bullish and bearish forces. According to the hourly chart, the MACD's bearish momentum is releasing, and there aren't any signals for a reversal in the candlestick chart. Nevertheless, the price will not fall much in the hourly chart as it has approached the Bollinger lower band. If it reaches the Bollinger lower band, it will be a good chance for us to go long. However, the recent fall from highs suggests strong upper resistance, so investors should not expect too much shortly. When the price begins to reverse in the hourly chart, the rising space may increase.

Today's trading recommendations: Buy at lows. If WTI retraces back to 80.2, try to go long with small positions and set the stop-loss at 79.7. To take profits, the first target will be at 82.5, where investors can reduce the position size and move the stop-loss to breakeven, and put the second target at 83.5. If WTI plummets below 80.0, investors should not go long today unless there is a sign of stopping declining after a plunge. Buying Lows Works in A Weak Pattern_1

Trading Recommendations

Trading direction: Long

Entry price: 80.000

Target price: 82.500

Stop loss: 79.500

Support: 80.000/77.800

Resistance: 81.500/83.500

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