Light Crude Oil WTI Futures #CL has a monthly demand level located around $48.64 that gained control a couple of months ago. The fact that we have had that monthly imbalance in control allowed us to make too decisions. 1) No shorts would are allowed trading against a big timeframe demand imbalance that has gained control. 2) Only longs would be allowed. As explained in previous Crude Oil video analysis
Light Crude Oil has been rallying for a few weeks now creating a new weekly demand level around $45.54 and potentially creating a new weekly demand levels if price continues to rally. There is a clear long bias providing buy opportunities on Light Crude Oil Futures, a lot margin for profit on the way up to weekly supply zone around $73.25 a barrel
We do not take into consideration any fundamental analysis to trade futures, no earnings announcements or volume, we do not need any of that to make a trading decision based on supply and demand imbalances. We just need to know where those imbalances are located and what is the bigger picture trend on the stock.
Still if you pay attention to news, in the beginning of February Oil prices have fallen after disappointing US factory data sparked fresh concerns about a slowdown in the global economy. Brent crude futures dropped 0.2% to $62.6 a barrel, and US West Texas Intermediate fell 1.4% to $54.48 a barrel. Oil prices had been buoyed by a new round of supply cuts from Opec and its allies.
Can we really make sense out of this Light Crude Oil news? Maybe you can, but do we really need it? No we don’t. Price reached a very strong monthly demand level, we are allowed to buy Light Crude Oil but we are not allowed to sell it.
You can also use various options strategies to take longs at demand imbalances, long calls, spreads or any other strategy that you might have on your trading plan.
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