Good morning, Traders!
For this morning’s Daily Direction, I’ve got a special report on a market we haven’t talked about in some time. There’s a good chance this symbol could give us an opportunity for a solid trade soon.
Thanks to the pandemic, light crude oil futures are back in the mix after a bit of a hiatus. The energy sector took a big hit as the global economy shut down last year. That means oil prices stagnated thanks to a lack of demand. Now, as more people venture out and businesses reopen, that demand is set to rebound. But what does that mean for oil futures?
When looking at Light Crude Oil Futures (CL), we see that the market is hitting resistance. But we see that in the monthly timeframe chart. For now, we’ll hold off on looking at the daily and one-hour timeframe. Here’s why:
We don’t often talk about the monthly timeframe, as our focus is usually the daily and the one-hour timeframes. But the monthly timeframe is just as important when we’re looking for a market that could present profitable trading opportunities. Let’s take a look at the monthly timeframe chart for CL…
Monthly Timeframe Analysis
The monthly timeframe chart shows that CL is pushing up against resistance (upper grey line). I’m waiting to see if the price pushes past resistance and starts a bullish run or bounces back down in a bearish trend.
The monthly timeframe for CL reveals that the market is in a position to either rally bullish or slump back into a bearish push. We’re in a wait-and-see situation for now. If the price is able to break resistance, we could see a price run toward 95.75. That would equal a +3,000 tick movement! But if resistance holds, we could be in for a 4,500 tick bearish run.
The Bottom Line
Right now, I’m keeping my eye on crude oil futures to see which way this breaks. This is one of those situations where we haven’t really been trading this particular market for quite some time, so we turn to the monthly timeframe to determine the overall direction. Once we have a solid idea of where the market is going, we can turn to the daily timeframe to find our high and low prices, and then the one-hour to see where we can open a position in the market.
Stay tuned for more information on CL as this opportunity develops! I’ll update my analysis as the market moves, so be sure to follow along. Don’t miss out!
Mindset Advantage: Greed
We hear the same story time and time again: the money gets made, the profits are amazing… and then it’s all given back to the harsh maiden of the market.
It’s not because the money isn’t there to be made. It’s often due to good old-fashioned greed. Stops get pushed back. Targets get forgotten. That trade made $100… why not turn it into $500 or $1,000?
These are the traps that snare 95% of the profit. Take what the market gives you and go about your business. ‘Honor thy stop’ and your risk reward ratio. Don’t take that trade if you don’t feel good about it.
The ones you don’t take, or the ones that you end up stepping out of… those are the ones that keep you on the path to consistent profits!