Crude Futures Price Action is Near a New Inflection Point

Follow the links to my previous posts to get the bigger picture of my oil futures thesis. Click the link below to check them out.

Crude feature's prices has been on a downward trajectory but is currently sitting just beneath the 200-day exponential moving average. This moving average is widely considered as a very strong support/resistance level.

Some investors consider the 200-day moving average as the ultimate barrier between a bull market and a bear market. If the crude's price dips below this moving average, then you could consider it has crossed into bearish territory.

Personally, I prefer the simple moving average over the exponential moving averages. But it's common to see a rebound at either one of these widely followed moving averages. So, the price could possibly fall to the SMA before anything notable happens.

The short-term picture is pointing downward for crude. So there could very well be more downside soon. But the current downtick is slightly oversold. You should always take note when you see oversold conditions while the price action is hovering around the 200-day moving average. A rebound is likely.

Keep in mind that crude oil price is determined by supplying demand. So keep your ears open for any escalation in conflicts within the Middle East, expanding or contracting economic conditions, and economic data pretending to oil supply or production. These variables might give you a good idea of the direction of oil prices.

The short-term trend is down but also oversold. I think a short-term rebound is about to happen in the next few trading days. I will be watching for it.

Personally, I am becoming more bearish towards oil day by day. I wouldn't short oil with long-term leaps due to all of the geopolitical tensions. But until I see a legitimate rebound, then technically speaking, the charts are bearish in the short term. So, any short-term oil plays will be to the short side.

I should say for the record that I was very bullish on oil as soon as the Isreali-Hammas conflict started. Obviously, not so much anymore.

By the way, if you had managed to catch my initial comment that hinted towards the current bearishness, then you would have likely found a good oil short by now. This post is over a week old, and shorts have dominated as the price is down over 3% since.

As always, I am not a financial professional, and this is not investment advice. Be careful and be patient. Dont anticipate the market. Rather, participate in the market. Give some of your investments time and know when to cut your losses. Don't be greedy. Don't invest in anything you don't understand. Don't put all of your eggs in one basket. Don't listen to the hype. Don't fomo or panic into or out of trades. Do your own due diligence. And just follow the trends. A trend is your friend. Good luck trading.