Oil Reached Upper Channel - Time For a Pullback

Jan 7, 2021

USOIL (WTI Crude Oil) SHOST SETUP IDEA

Entry: $50.94
Stop Loss: $51.82
TP & RR: $48.39 (2.9)

REASONS FOR THE TRADE

So far Oil has respected the channel fairly well and I am expecting at least some pullback (best case scenario reaching the lower trendline).
The Stop Loss is set at a good distance, so generally speaking, a small fakeout shouldn't trigger it. Breaking above that channel, however, would invalidate the setup and I would look for a good place to open long. If you are a breakout trader then this would be your opportunity.

My suspicion is further confirmed by the two indicators I am using below, printing a decline in volume and momentum. The effective volume bars give a clearer picture of what's going on in a smaller time frame.

Jan 7, 2021

Trade closed manually

I don't like how this trade is developing. I was expecting a more sudden drop considering the resistance level and exhaustion that were apparent. Also, a new trendline has formed, which may indicate that OIL is not yet ready for a dive.



I am manually closing the position and will be looking for a better entry-level if price goes up. I may be wrong, but I just hate to have a profitable position turn into a loser and lowering the SL here doesn't make sense.

Let me know how you are handling this trade in the comment section below. I will continue to update it or alternatively post a new trade.