Have you missed the neckline analysis of crude oil?
During this retreat, if you're still pessimistic on the commodity, you might want to consider going short.
Look at this setup for a trend reversal on the 4-hour time frame!
The neckline of the head and shoulders formation of crude oil was broken, indicating the possibility of a downward trend.
But corrective mode is still active! The 61.8% level, which already seems to be drawing more bears, is the area of importance, according to the Fib retracement tool.
If so, the commodity may soon return to the swing low of around $78 per barrel or it may decline by the same amount as the chart pattern.
While buyers are taking a break, stochastic is already heading downward from the overbought zone, indicating that bearish sentiment is about to return.
The 100 SMA is, however, above the 200 SMA, indicating that the upward direction is the one with the least amount of resistance. In other words, there's still a remote possibility that the uptrend will start up again.
It's important to note that the distance between the moving averages is closing in, which indicates a slowing bullish pressure, and that the 100 SMA is heading lower, which suggests a likely bearish crossover.
When trading this one, just be sure to pay attention to the mood of the market as a whole!
