Oil descending triangle close to major daily support
Daily /CL is showing a descending triangle that looks to be close to a breakout. If it breaks to the downside, I think it will retest a major daily support level that dates back to 2015 (noted via the dashed line at bottom).
Fundamentally, oil is at the mercy of geopolitical issues. Right now there is a lot of uncertainty between the U.S.A. and Iran. Iran controls the Strait of Hormuz, and about a third of the world's oil passes through there. But, the U.S.A. is becoming a big time oil player, so the need for Hormuz is in question (I think). In addition to the Iran stuff going on, there's also the trade war and worries of a contracting economy - both of which are bearish for oil for a multitude of reasons, mostly demand.
If a break to the downside happens, I will most likely go short. However, because of the fundamental uncertainties and how reliant oil is on geopolitical issues, I will keep my stop losses pretty tight. I will try to play it down to at least the major daily support level, and then possibly look for a bounce-off entry to retest the bottom of the triangle.
Fundamentally, oil is at the mercy of geopolitical issues. Right now there is a lot of uncertainty between the U.S.A. and Iran. Iran controls the Strait of Hormuz, and about a third of the world's oil passes through there. But, the U.S.A. is becoming a big time oil player, so the need for Hormuz is in question (I think). In addition to the Iran stuff going on, there's also the trade war and worries of a contracting economy - both of which are bearish for oil for a multitude of reasons, mostly demand.
If a break to the downside happens, I will most likely go short. However, because of the fundamental uncertainties and how reliant oil is on geopolitical issues, I will keep my stop losses pretty tight. I will try to play it down to at least the major daily support level, and then possibly look for a bounce-off entry to retest the bottom of the triangle.