Crude oil retraced its Wednesday rebound, effectively extending its consolidation.
Crude oil futures contract rebounded on Wednesday, but on Thursday, it retraced that advance and closed 1.67% lower. The market has essentially extended its consolidation following the January-February declines. After breaking below the October-December lows, it has remained in a sideways pattern.
Today, oil prices are up 1.0%, continuing a consolidation. While this appears to be a consolidation within a downtrend, the market may still be in the process of forming a bottom.
Conclusion
Crude oil continues to consolidate as geopolitical developments and stock market sell-off contribute to uncertainty.
Is this a good time to open a short position? I don't think so - the market is approaching strong medium-term support levels and could move sideways or rebound.
For now, my short-term outlook is neutral.
Here’s the breakdown:
- Crude oil remains in consolidation.
- In my opinion, the short-term outlook is neutral, and no speculative positions are justified from the risk/reward point of view.
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Thank you.
Paul Rejczak,
Stock Trading Strategist