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Unum Capital: Technical Trade Idea – Is Crude Cracking? – UnumCapital
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Unum Capital: Technical Trade Idea – Is Crude Cracking?

Unum Capital: Technical Trade Idea – Is Crude Cracking?

Dear Trader

The price of oil has had a very strong run on the back of (1) No additional supply by Saudi Arabia (2) Potential for further sanctions on Iran which may reduce additional output and (3) five straight weeks of inventory declines in the United States from August through September.

Since the short term pullback in August, the price has added a hefty $15 – appreciating from $71 to above $86 today – a four-year high.

Now, with many emerging economies and net oil importers feeling the impact of potentially lower GDP growth as well as US stockpiles starting to rise again, we could see Brent Crude give up some of it’s recent gains. Additionally, we have seen news overnight that Saudi Arabia and Russia have entered into a private agreement in September to raise output in order to cool surging prices.

Technically, we are starting to see early signs of a slowdown in upward momentum, while the price is trading near resistance which is setting up an opportunity for traders to play the downside.

In order to participate, you will need an offshore trading account. 

These are the trade levels: 

Short/Sell Brent Crude Oil around current levels $86.17 (or higher)
Stop-loss: $89.00
Take Profit Target: $80.00

Lester Davids

Lester joined Unum Capital in July 2016 and is a Trading Desk Analyst focusing on local (JSE) and global multi-asset class technical strategy and research which includes idea generation.

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