CL Analysis for coming week

Good morning – I hope everyone is enjoying their weekend.

Since I’ve been trading the crude oil futures a lot more these days, I wanted to share my thoughts on the longer term charts and some scenarios on how it might trade next week  I will start with the Daily chart:

The daily shows a very obvious tight range/consolidation since early October between 79-84.  The bounce off 38% Fib retracement shown on the chart is bullish and sets up a bull flag scenario with prices approaching 84-86, and eventual resistance in the 90-92 area.

Should it fail to breakout higher from this range, I would look for the 50% and 61.8% Fib levels to be tested, and if these do not hold, I would look for support in the 67-69 range.

Now, let’s look at the hourly chart below:

The tight range channel can be clearly seen here as well and the unexpected move late on Friday afternoon (on volume, I might add), brought the price right back to the top of the channel.

I believe this sets up a move above this channel and back to the 84 area in the very short term, but it all depends on the reaction of the markets to the G20 meetings this weekend.  Where it goes and how it reacts at the 84-85 level will determine the outlook for the next few weeks.

In any case, as I have written many times on this site, I am not in the business of predicting where prices will go on Monday or Wednesday next week or any time in the future.  I merely follow price action, understand where my support and resistance areas are, and take the high probability (and lower risk) trades.  Analyzing the chart setup helps me plan my actions and my trades during the week.  But I will not hesitate to change my bias at any given time should the chart show any significant changes.

I hope this helps.

Good luck and good trading next week

Anatomy of an Intraday Chart of CL (Revisited)

I wanted to follow up on the post from this morning regarding CL December futures 5 min intraday chart.  Below is an updated end-of-day chart:

Points 1-6 were discussed in the previous post.  However, on point 6, the support zone has moved since the chart was in an uptrend all afternoon.

7. 7a and 7b show the price touching the support area around 80.60 with the occurrence of a divergence on the MACD.  A bounce from here would give very good odds for a long entry, which is exactly what happened.

8. Minor resistance area was taken out around 81.30.

9. Major resistance area was taken out around 81.60 and price continued to 82.10.

Strange action so late on a Friday afternoon for CL, but it is what is. All we can do perform the analysis and make real time decisions on what we see.

We’ll see what Monday morning brings.

Good trading.

Update on my ST50 picks this week

I want to start following up on my picks from the ST50 each week and report on their performance.

While many stocks on this list did extremely well, this is a way for me to record my results as well.

Here goes.  These were my picks from the weekend:

CTSH : Setup was long over 66.80 (sorry, typo in the chart). Setup triggered yesterday and was good for at least $1.45 (2.2%)

AMZN : Did not trigger until today (post earnings and was a big winner), good for at least $5 (3%)

LXK : Triggered long at 46 on Wednesday and was good for about $1.30 (2.8%)

NBIX : 8.25 was triggered on Tuesday and was good for about 40c (4.8%)

MIPS - probably my favorite setup: Triggered at 10 on Monday and was good for around 50c (5%)

All in all – not bad at all.  But then again the market has been unstoppable.  Hope some of you caught some of these moves.

I’ll post some more charts over the weekend.

Have a great weekend.

Anatomy of an Intraday Chart of CL

Good morning.

I wanted to post and analyze a 5 minute chart of the CL Crude December futures.  Earlier, I talked about rising trendline, breakout, false breakout, etc. and wanted to share what exactly I was looking at.  Below is a 5 minute chart of CL:

There are 6 areas I’d like to focus on:

1. This is a horizontal trendline at 81.60, which also coincided with a major resistance area.  Usually at 9AM EST, there is a heavy move in one direction, and the thought process was if it breaks this level on some volume, it would breakout.  Which it did.
2. After the breakout, the next candle formed a Doji right on minor resistance at around 81.75.  At that point, some profit was taken and stops moved to breakeven.  Subsequently, the next candle dropped the price right back below 81.50 and the initial breakout/resistance area, signaling a false breakout.
3. Shows the rising trendline Tweeted about, going back from around 3AM EST.  As soon as it closed below it after 9:30AM, it moved lower to the first support area of around 80.90-81, where it has bounced briefly.
4. Shows the are of minor support at 80.90-81.00.
5. Shows the next area of support at 80.50-80.60.
6. Shows the next area of support at 79.35-79.50.  This area is a major magnet should CL decide to break below 80.50.

I hope this was educational.  Whatever indicators you use in your trading, on whatever timeframe, introducing and using trendlines and support/resistance zones will greatly enhance your trading, not to mention money management techniques (knowing where take profits, etc.).

Please do not hesitate to drop me a comment or tweet if you have any questions.

Good trading.

Trading radar for Oct 21

Good morning.

NFLX - the juggernaut, continues on a tear.  So, far earnings this week have been well received.  The selloff on Tuesday appears to be an aberration as it was almost fully recovered yesterday.  This puts us back in up trend mode.

Futures are higher this morning but appear to be selling off a little bit, so we'll see what happens.

The following stocks are on my radar today:

Long:
ISLN
EBAY
ALXN
JBLU (or any of the airlines)

Short:
CRUS
PLCE
FITB
CY

CL recovery yesterday puts us back  in the range of 80-84 that we've been stuck in since early October. A break of this range either way will provide for a powerful move IMO.

I am looking for short opportunities in CL, 6E and GC today.

Good luck and good trading!

My favorite setups from the ST50 list for next week

I hope everyone is having a great weekend.

Well, it was certainly quite an impressive week with some phenomenal action in individual stocks.  Momentum names were up big, financials took a beating, and solars sold off hard on Friday to give up the entire week's gains.

I still believe there are some warning signs of a a correction - but it has not materialized into actual weakness in the indexes.  On the contrary, the markets held up extremely well in the face of a selloff in Financials and some semis including Intel.

Looking at the chart of the SPY, there are some major challenges ahead.  Some strong resistance areas are coming up in the 120-122 area.  The election is coming around soon, and the majority of earnings will be released the next couple weeks.

It is clear that there are some major hurdles to keep this rally going. It would appear a lot of good news has already been priced in.  But how much good news?  This market has managed to surprise and just like the Energizer bunny, it just keeps on going.

The following are stocks that I will keep on my watchlist from the Stocktwits50 list:

CTSH
AMZN
LXK
NBIX
MIPS - probably my favorite setup

Don't forget to keep an open mind and not be 'married' to a position or an opinion.  Things change on a dime and we must be prepared to adapt appropriately.

Good luck and good trading!

Trading radar for Oct 14

Good morning!

With OpEx tomorrow, and the SPY at dizzying levels, not looking to do a whole lot the next couple days. Smaller size, quick profits and not holding anything for an extended period of time.

The following stocks are on my radar today:

ZAGG
RVBD
ARUN
ARMH
APOL (Or any education stocks with good short setups)
AMED

I'll also be looking for short opportunities in EUR, CL and GC.

Have a great day and good trading.