Crude Oil and Natural Gas Nearing Inflection Points

Equity markets ripped to new time highs today across all of the major averages, but that’s no longer impressive, that’s an every day thing.

It was commodities that were interesting today, specifically crude oil and natural gas nearing inflection points.

We’ll look at crude oil first, and we can see on the chart below that bulls are trying to break us out above multi-month $54 resistance level.

Chart 1 - The Trade Risk Evan Medeiros Swing Trade Alerts

Bulls didn’t get the strong close they might have preferred, but they certainly kept sellers pinned against the wall into the end of the day.

We wrote about crude oil in early February and how it was looking ready to roll over from this same range, we even took a short trade via DWTI which resulted in a loss (I walked through that trade in this video).

Now that we’re back to testing multi-month highs, it’s tough not to like crude oil for an upside breakout. We have no position at this time, but a rally above today’s highs and that might change.

Natural gas also had an explosive move today.

Chart 2 - Crude Oil and Natural Gas Nearing Inflection Points

It fell nearly 10% today alone,  bringing it’s total year to date performance down to -30% (and we’re only in February!).

The chart above shows long term support dating back to July of 2016 around this 2.55 area that we’re coming in hot for a re-test.

(shout out to @michaelbozzello for bringing that level to my attention)

If you’re looking to buy the dip in natural gas, you’re getting into valid knife catching territory right here.

Thanks for reading and good luck out there.

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Evan Medeiros

Evan is the founder of the Trade Risk. With 25 years of coding experience and a B.S. in computer science, Evan brings a systematic discipline to investing in the stock market.

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