FxWirePro: Don’t get bull trapped in WTI crude as 21DMA on the verge of crossover 7DMA - Stay short in CL1! Futures for TP of 41.04

After yesterdays’ supply glut EIA’s inventory check, crude bears resumed and prices tumbled from 43.36 to the 41.26 levels.

The current rallies have no momentum in buying interests, may drag to test the stiff resistance at 41.84 levels (around 7DMA, see daily chart).

Daily technicals suggest sell indications as the RSI signaling clear convergence with the dipping prices (currently RSI trending below 44 levels while articulating).

While slow stochastic have reached oversold zone but no traces of convincing %K crossover (currently %D line at 7.0081 & %K line at 10.8266), so overall we still see selling pressures in this commodity at the current stage.

While plotting weekly graph, “Gravestone Doji” and "Shooting star" appeared at peaks of 48.93 and 47.58 levels respectively that have evidenced bearish effects already and signals more weakness as leading oscillators clearly converge on-going price dips.

Weekly RSI converges downwards below 46 mark and stochastic oscillators entering into oversold trajectory with &D crossover which is deemed as weakness in this pair.

Current prices have slid well below DMAs as well as EMAs, while MACD with bearish crossover attempting to slide below zero which is bearish zone again.

Trade tips:

At current juncture contemplating above bearish indications, on speculative grounds we recommend shorting near month futures for target towards $41.04 levels in near terms.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

These margin requirements are determined by the exchanges and would usually be ranging from 2 to 10% of the full value of the futures contract.