Oil - Higher Weekly Low - Intraweek support chart #6

As this daily oil range continues to drag on I look to the Daily Supply levels shown on the left of the chart for clues. After getting two daily closes above the 53.51 Daily supply level; I think prices may now look to it as resistance and rally one last time; Above the 53.89 level I needed to look at the H (March) front month chart for higher daily supply levels (see chart below). After analyzing H, I believe prices will test and find strong resistance at the 54.5-54.8 level; Prices may see a very quick fall after this as shown above; prices have not spent more than 4 days above or below the 52.44 level and Tuesday February 7 will mark the 5'th day. If prices bounce at 52.55, I will look again to the 53.5-53.9 levels as strong supply; this is also in line with a potential bat pattern which would lead prices to the 51.4 target level.

Simple Summary:
Short Entry: 54.5-54.8
Stop Loss: 55.25
Target 51.45
Stagger: If prices bounce at 52.44, add short positions at 53.5 level.


Good trading all!

Comment:

H Chart Daily Supply/Resistance Levels

s3.amazonaws.com/tra...shots/j/jtnyTkFr.png

Comment:

I have always been a huge fan of Richard Wyckoff's work: here is a schematic of his Distribution range schematic; I believe prices are currently showing a similar pattern:
d.stockcharts.com/sc...offdistribution2.png