Trade Recommendation: West Texas Oil
The West Texas Oil/US Dollar (WTICO/USD) pair began to show signs of weakness in May 2011 when it generated a lower high of $114.448. This was a clear indication that bulls have lost their steam. The market went from bad to worse in October 2014 when it broke support of $90. This activated the rounding top reversal pattern on the monthly chart.
The break below the crucial support ignited a selling frenzy. It took WTICO/USD over one year to find the bottom at $25.754 in February 2016. At this price point, the pair was flashing reversal signals.
First, the monthly candle was a hammer. It had a long wick below its body, which indicated that bulls were starting to show up. In addition, the pair generated four long red candles while detaching from the 4-day, 9-day, and 21-day moving averages. This was a signal that the drop was unsustainable.
Those who saw the writings on the wall entered the market. This ignited a powerful rally that marked the start of a new bull run.
Technical analysis show that the West Texas Oil/US Dollar pair has breached resistance of $60 in January 2018. This triggered the rounding bottom reversal pattern on the monthly chart. The breakout was affirmed by a move up to $72.867 in May 2018. Fortunately for you, the market is pulling back. This is your opportunity to buy the confirmation of the breakout.
The strategy is to buy as close to $60 as possible. If bulls stay above this level, they will gather the momentum required to rally to $90.
The process may take more than six months.
Monthly Chart of West Texas Oil/US Dollar on OANDA
As of this writing, the West Texas Oil/US Dollar pair (WTICO/USD) is trading at 65.279 on OANDA.
Summary of Strategy
Buy: As close to $60 as possible.
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