Is The rock Mcx Crude oil Short Trade Over Crowded?
Key Points:
Price action fails to breach $50.00 handle and short move is stalled.
100 day MA and key support zone is limiting draw back moves.
Watch for a bounce towards the $51.90 target within the coming back week.
The past few days have seen the worth of rock oil (WTI) collapsing towards a serious support zone round the $50.00 handle. The move was comparatively obvious given the actual fact that value action did not break through resistance at $53.74 resulting in a pointy rejection and sentiment swing to the short aspect. later, traders mostly concentrated in to short positions however with WTI costs having currently reached the $50.00 level its price asking if the trade is currently over thronged.
The reality is that rock oil costs area unit reacting to not simply technical factors, however conjointly a variety of shifting fundamentals with international organization chief amongst them. later, only if oil costs stay powerfully inside associate ascending channel, the draw back was forever seemingly to be restricted particularly once international organization is countering falling costs with a possible extension to their gift provide cuts. Therefore, the short aspect push was solely ever seemingly to require the goods to putting distance of the $50.00 handle.
Currently, the big institutional cash (smart money) is winding back its short positions and searching for a few gains in rock oil costs within the coming back week. later, information superhighway positioning is shifting long and also the initial signals too soon Fri is one among some upward pressure. this can be particularly discerning only if value action is presently sitting right the one hundred day MA, additionally as key support zone.
In addition, rumours area unit presently whirling that future international organization meeting in could might achieve associate extension of this provide freeze and even doubtless any cuts to world international organization provide. only if international organization leaks sort of a wire canoe it’s no surprise that this data is pervasive markets.
Subsequently, the assembly cut rhetoric is considerably limiting any more draw back moves, from a basic perspective. whether or not international organization really follows through with the reputed cuts is another question however the risks area unit definitely slanted to the side given several members desires for the next oil value to balance their domestic books.
Ultimately, the short trade has currently become overcrowded and any more decline below the $50.00 handle within the short term is unlikely. in addition, the technical indicators also are suggesting another optimistic wave higher only if value action rests at the junction of the one hundred day MA and a few key support. later, the foremost seemingly situation for the week ahead is a few sideways consolidation before a possibility back on top of the $51.00 handle and appreciation towards our short term target of $51.90 a barrel.