Crude Oil – Wait and watch what will happen!!

Support and resistance are important foundation concepts in Technical analysis, as well as in price action trading. The common theme with price action traders is they don’t predict the markets, rather trade with market flows and fluctuating market sentiments. Normally price action is called as “Trading what you see – Not what you think”. My articles don’t predict anything, it provides important overviews, guidance for traders to adapt and trade. Predicting the Markets is a futile job, and statistically it’s impossible. Of course, there are thousands of tips providers and the so-called crystal ball holders who are doing nothing more than random guesses to fool people into thinking that they have some special abilities to predict the market. Real traders and successful traders don’t predict because they know reality of market place.

Crude oil trapped trend traders with sharp counter trend movement. Oil rose nearly around 13 dollars per barrel from 26.00 to 39.00 in terms of Price value. This Particular movement took place from Feb 11 to March 11; price gains were quite steep and sharp, it influenced the psychology of speculators and Investors. But it’s not uncommon for Oil to make such counter trend movements, we can notice the same scenario taking place last time around September 2015 from 38.00 to 50.00. (See the chart below)

These previous moves were nothing more than a shallow retracement. The only difference between then and now is, currently price action is holding in an important support level on monthly time frame.

At present, Price action is testing an important resistance level 39.00 on daily time frame and there are no indications of sellers as of now. But that doesn’t means, it’s time to initiate long positions!! We need to wait and watch the developing price action for any decision-making process. Also notice how the market failed to hold at previous resistance level at 34.00 around Feb 26 (Marked in the chart at bottom) Trading is all about stacking odds in your favor – More probability the better trade.

Traders and market participants should watch the resistance level at 39.00 and should do what price action tells them, and not listening to some dumb tips providers or opinions. Charts has all the information you need; it’s a statistical representation of financial market – If you know how to use the chart, then you are a successful trader. But don’t expect charts to predict the future, because this is not physics, its finance. Technical analysis is all about reading the market psychology using the charts. If you’re looking for easy buy-sell indicators promising heavens – I would say, they don’t exist.