Nadia Simmons
Sunshine Profits
Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective.
On Tuesday, crude oil moved lower after the market’s open weakened by an unexpected decline in monthly U.S. gasoline demand. Despite this drop, the commodity reversed and rebounded in the following hours. As a result, light crude gained 3.10% and invalidated earlier breakdown. What does it mean for oil bulls?
Yesterday, crude oil extended losses after the market’s open after U.S. government data showed the first monthly drop in gasoline demand in 14 months. Despite this drop, the commodity reversed and rebounded in the following hours on hopes that weekly inventories data would show smaller-than-expected increase in crude oil supplies as Friday’s Baker Hughes showed that the U.S. oil rig count dropped by another 10 to 362 (which was the lowest count since Nov 2009). Thanks to these circumstances, light crude invalidated earlier breakdown and closed the day above the previously-broken Fibonacci retracement. What does it mean for oil bulls? Let’s examine charts and find out.
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