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Today’s Trading Edge: US Oil – Double Bottom and US Inventories Decline Drive Oil Higher

Posted by Edward Moya on Sep 24, 2014 1:47:00 PM

WWM US OIL SEP 24 2014

U.S. oil prices rallied 30 cents to $91.86 after the Energy Information Administration announced that Oil inventory for the week ending September 19th declined by 4.27 million barrels to 358 million.  The report was quite a surprise as forecasts anticipated an increase of 700,000 barrels. 

The rally also coincided with a potential double bottom pattern that is displayed on the daily chart of West Texas Intermediate crude (WTI), also known as US oil.  With demand remaining at the slowest levels since 2011, price action may see sellers fade this rally.  If price is able to rally towards 92.80, a bearish Gartley pattern may form and signal a reversal that may look to ultimately target fresh new lows for the week.  Key support remains the 90.00 handle, with further support targeting the 86.00 zone.   

The trade: Sell US Oil at 92.80 with a stop loss at 93.40 and a take profit at 91.60  The Risk/Reward Ratio is 1:2

Edward J. Moya

Technical Strategist

WorldWideMarkets Online Trading

Topics: Commodity Trading, $OIL, oil price

 

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