Oil Springs The Bear Trap At Prior Support
Last week we published this post on crude oil, pointing out how vulnerable that market looked based on recent price action.
Members and I were lucky enough to capitalize on that trade idea late Thursday by jumping into $DWTI a 3x inverse ETF of $USO.
It was a quick two day breakdown trade for us, locking in approximately a 9% gain in $DWTI while luckily escaping before yesterdays intraday reversal.
But yesterdays reversal is proving to be more than just a one day rally as we’re seeing a meaningful follow through session higher today.
Suddenly, we’re back above significant multi-month support after capitulating longs below $10 and likely catching some late shorts into the mix.
It looks like a classic bear trap overshoot of support.
Going forward this market starts to look more attractive on the long side so long as it can maintain above prior $10 support.
Also take a look at the current weekly candle of $USO and you can see if it keeps up this strength into the end of the week, we could potentially end with an engulfing bar.
Hope this helps, and good luck out there.
Oh and don’t forget, we’re holding a free webinar this Thursday (11/17), Swing Trading For The Active Trader, you can sign up here.
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