Like it or not, the price of crude oil dictates the prices that we see throughout much of the economy.
Take shipping, for example. When crude oil prices rise, it means the trucking companies that deliver goods across the country have to pay more to fuel their fleet.
Those increased costs are then passed down to consumers like us in the form of higher prices on store shelves.
This is one of the big reasons we are seeing multi-decade highs in inflation readings.
However, for traders like us, we can use the rising price of crude oil to our advantage…
Crude Keeps Working
Here’s how I see the hourly timeframe for crude oil developing for a further bullish push either above the top of the channel or near the bottom of the channel…
The CL one hour time frame is in an up channel. The market is near the top of the channel where resistance can be found.
It will be a good idea to wait for the market to either fall towards the bottom of the channel or break and close above the top of the channel before looking for long ideas.
Entry: Counter trend line break bullish near the bottom of the channel or above the top of the channel.
Stop: In the sell zone below the entry.
Limit: If entry is near the bottom of the channel, the limit will be just under the top of the channel. If the entry is above the top of the channel, then the limit will be the next one hour Fibonacci extension.
Once or if the one hour time frame provides the entry, it will be a good idea to turn to the five minute time frame and to look for Tunnel Trader / Destination Trader / Chandelier Trader long ideas towards the one hour price target.
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The Bottom Line
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Keep on trading,