Putting short-term and long-term charts in perspective

 

Did you ever encounter different views on a different time-frames? Showing you a different picture. What to choose for trading? What strategy? That is where your sense of trend direction kicks in. What do we have looking at the Oil charts now?

Looking at the monthly chart above we can see that the instrument has broken below the strong downside resistance 11800 level and is testing the long-term uptrend line 11000 level of the support. A daily close below this level would lead to an extended downside into the 9500-10000 zone.

For some traders which are not using the top-down trading analysis, the problem is arising when they look at the weekly chart and they are intrigued by the latest bounce off the long-term support trendline 11000 level and a weekly close above the 200 SMA 11460 level. Some see this as a bottom for an uptrend continuation. So the pair is still above the 100 and 200 SMA’s on a Weekly timeframe. This bounce could be used for a swing trading with a good risk to reward.  Target should be in the 12000-12300 zone and the risk to reward for this kind of long trade is excellent.

A Daily chart is revealing the 11000 level uptrend line support and traders should be looking for the long trades from here. Your stops should be below the 11000 level. This will be then a long trade with the 500  of the risk comparing to 800 points reward per contract which is excellent for trading.

 

The main conclusion of this technical analysis insight is that in the medium-term DAX will have a higher probability to swing higher and the invalidation of this swing higher will come only on a daily close below the 11000 level.

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