This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
I linked yesterday to a chat transcript that outlined a couple of easy trades. Yesterday, oil rallied in the early afternoon. This morning it gapped up, and completed a 5 wave rally. It formed a double top, and broke a steep trendline. I went short.
The dotted and dashed lines are areas that I thought might prove to offer support. I marked on the chart where I entered, and moved my stop. I was hoping it would fill the gap, but the outside bar (green) at the lows shook me out. That’s it for me today. It will be interesting to see if that was actually where it reversed, or if it trades lower.
Update: here is the chart from the close of the session. Obviously oil continued to fall, so that was a missed opportunity. The same pattern appeared again at the end of the day. The only variation from the 3 humps pattern is the double top. That adds another element to confirm the pattern as well.
This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com
