In this article, we will share top-down trading technical analysis for the Oil.
On the monthly Oil chart, we can see that the instrument is in the rectangle similar to a previous one when we saw almost $80 fall from a $120 level break to $41. It seems that this rectangle is not over yet but we could see a test of 50 breakout level sooner than later.
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On the weekly chart, we can see the important uptrend continuation support. It is now 53-53.50 zone. The weekly chart is also showing the possibility of an H&S formation. The measured target of this formation is now 20-25 zone.
By using our top-down trading technical analysis we have identified the key levels which will be your triggers for a trading strategy in this instrument upon an important downside break of the strong resistance. Preferred entry is short with the stop loss below the near-term uptrend line support level 52.10. Take profit target is 47.70 level at least.
