Facts:
- Head and shoulders formation appeared on the H4 interval
- OIL is trading below the 100-period moving average from H4 interval
Recommendation:
Trade: Short position on OIL.WTI at market price
Target: 59.00, 57.05
Stop: 63.60
Opinion: OIL WTI has experienced a big upward correction recently. However, looking at the H4 interval, we can see that sellers managed to halt upward movement near the 100- period moving average. In addition the price returned below the earlier broken upper limit of wide 1:1 structure at 62.12 (red rectangle). According to the Overbalance methodology, it may herald a resumption of a downward trend. Moreover we can see that the head and shoulders formation, which often heralds a trend reversal, appeared on the chart. The sellers managed to push the price below the neckline of the aforementioned formation, which signals a continuation of a downward move. Therefore, we recommend taking short positions on OIL.WTI at market price with two targets: 59.00 and 57.05 We also recommend placing a stop loss order at 63.60. Source: xStation5
