Brent Crude Oil Weekly Short Trade SetupBrent Crude Oil Weekly Short Trade Setup (as of May 22, 2025)
This chart reflects a prolonged downtrend within a clearly defined descending channel. Brent Crude Oil continues to respect the dynamic resistance of the upper boundary and has failed to sustain bullish momentum in recent months. The current price action presents a low-risk, high-reward short opportunity based on technical structure and projected price movement.
Entry Price: 64.994
The entry level at 64.994 is tactically chosen near the midpoint of the descending channel and slightly below the recent consolidation area. This level marks a rejection zone where price previously attempted to break higher but failed to gain traction.
The reason for this entry is:
• Price is reacting to the 20-period moving average (blue line), which has consistently acted as dynamic resistance.
• The last bullish push failed to close above the mid-channel zone and reversed near the projected retest line, indicating sellers are still in control.
• Entering here means you're entering after confirmation of a failed breakout rather than preemptively.
This is a conservative but smart entry point, favoring a continuation move in the direction of the dominant trend.
Stop Loss: 68.867
The stop loss is placed at 68.867, which aligns with the chart’s "Conservative Projected Retest Price Level" marked in green.
Here’s why this stop makes technical sense:
• This area corresponds to prior horizontal resistance and is very close to the descending channel’s upper boundary.
• A move above this zone would invalidate the bearish structure, suggesting a potential shift in momentum.
• Setting the stop here protects the trade against a deeper bullish retracement while still giving it enough room to breathe around minor fluctuations.
The risk is controlled, and you're only exiting if the market structure genuinely breaks.
Take Profit: 56.850
The take profit level is projected at 56.850, slightly above the "Weak Support Zone" marked in red.
The reasoning:
• This zone has acted as prior psychological support, but the label “weak” implies limited buyer strength here, increasing the chance of a breakdown.
• Price has tested this level before and rebounded only modestly, suggesting vulnerability.
• It also aligns closely with the lower boundary of the descending channel, which provides technical confluence as a realistic downside target.
• Setting TP just above support allows for safer profit booking without being too greedy, avoiding the risk of reversal right at a major support.
This exit point balances profit potential and probability, giving the trade a favorable risk-to-reward ratio.
Trade Structure Summary
• Trend: Bearish (confirmed by lower highs/lower lows and downward-sloping channel)
• Technical Confluence: Dynamic resistance, channel boundaries, horizontal zones, moving average rejection
• Market Sentiment: Weak upside follow-through despite occasional rallies, suggesting bearish control
Risk-Reward Outlook
• Entry: 64.994
• Stop Loss: 68.867
• Take Profit: 56.850
• Risk (SL - Entry): 3.873
• Reward (Entry - TP): 8.144
• Risk-Reward Ratio: Approximately 1:2.1
This setup offers more than twice the reward for the risk taken, making it an attractive candidate for traders seeking asymmetrical returns.
