Oil long trade opened

Oil has been in a modest uptrend for over a year and you may see that the best way to trade it was to buy on dips. In the end of January oil experienced a 9 dollar corrective move. However, it did bounce off 58 level and made another impulsive wave up. It then made another tumble down, but did stay above support forming two large candle pins on a daily chart at 60$.

This tells me that the commodity is going to revisit it’s this year high quite soon and I initiated a long trade at 61.20 level just when the oil slipped below short term support (today’s lows). I have take profit target at 65$ and stop 59.95. If my target is hit I would make three times more than I lose if price reverses and goes down below 59.95.

I am not going to open any buy (long) trades after that, but intend to watch the commodity carefully as trade wars, US shale market will have bearish consequences for oil and it may tumble some 20-30 dollars this year.

I do expect lots of huge moves this year in oil, gold and currencies with both trend continuations and reversals in mind.

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Disclaimer: Financial markets carry a high level of risk. Investor can lose all his money trading them. You should not invest money that you can’t afford to lose. Information on this blog is for information purposes and should not be regarded as an advice to invest.

Oil and Gold to form intermediate top

Both oil and gold have been in a mild uptrend for over a year now moving up and down in waves. It has been a time where you would have made more money by buying the commodities than selling them. However, if you are intermediate or short term trader you might see that playing on both sides would have been a good choice. Looking purely technically you can spot waves on both commodities. Taking that into account I will state that we will probably see gold and oil turn around in August and start trending down. I expect oil to top at around 50.00 this week and gold possibly too at 1270-1275 level.

If you look at gold chart below you can see three finished peaks. However, the second and the third peak are at about the same price level (the third is some 30 cents higher). Then you will spot a lower low formed and a rally right after it. I assume we will now see another leg down, that will take us lower to 1195-1180 level. I expect the fourth peak to be finished this week. I have intentions to short gold when I see strong selling on my short term hourly charts.

TRADE GOLD AND OIL ON eToro

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The same is true with oil. Oil chart actually more resembles head and shoulders pattern. You can spot around 5 technical peaks in the chart, with the last two peaks being lower than previous two ones. This leads me to a conclusion that another peak in oil is due any time soon. I actually think 50 level is the mark and oil may form its first leg down this week. Again, I intend to be a seller when I see strong selling coming on hourly charts.

At some point both commodities will pick up and start trending up, because the world geopolitical and economical situation does not look rosy at all, but for the time being, technical analysis tells me to be on the short side.

Gold and oil analysis

Gold and oil have been trending lower for quite a while. From fundamental point of view I see a lot of politics going on with both commodities. Due to annexation of Crimean and turmoil in Ukraine Russia faced a lot of pressure from the West and one of the reasons for fall in oil prices could be just this. I can never be sure about it, but big boys definitely have means to push the price of oil or any other security. Of course, there are other reasons too. However, no trend continues forever. On the one hand we could see oil going to 60 bucks per barrel and stay at that level for quite a while. On the other hand, we could see gold bottoming in the area of 1000-900 per ounce. You should remember that gold is a currency as well as cash and in such troublesome times as these you should invest in gold. I mean you should possess it in physical forms. Silver is an alternative, of course, if you cannot afford buying gold. At some point, we might see nations collapsing economically due to debts in government sector.
TRADE GOLD, OIL AND CURRENCIES ON eToro

Disclaimer: All trading involves risk. Only risk capital you’re prepared to lose. Past performance is not an indication of future results. This content is for educational purposes only and is not investment advice.

For the time being, more pressure will be coming to both commodities. If you are a swing trader you should consider selling gold at resistance of 1220-1180 (previous support, now resistance) level down to 1000 level. Selling pressure may come as early as the beginning of next week.

Now, oil is currently at resistance. The commodity ended the week at resistance and you might expect oil to start falling to new lows from these levels. We are in a downtrend and you should only sell rallies when downtrend is in progress. Price may do some topping process at these levels, but I am pretty sure that it will go through the floor sooner rather than later.
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