$30 Per Barrel Achieved For Crude Oil; What Now?
Corey Rosenbloom: Crude Oil finally (and fully) achieved its downside round-number target of $30.00 per barrel this morning.
What’s the play here? Let’s update our chart, learn a quick lesson, and plan the future.
The first thing we do when we look at a price chart is assess the trend (Up, Down, Sideways).
When a trend is in motion, odds favor continuation of the trend, NOT reversal (so many traders get this wrong).
Crude Oil reminds us all of this lesson as the commodity has been downtrending since the $100 level breakdown in late 2014 – the downtrend has been relentless (and shows no official signs of stopping with today’s new low).
This is the first thing we cover in our “Getting Started with Technical Analysis and Trading” Lesson Bundle.
When a trend continues, we look to play retracements or flags that develop in the direction of the trend.
However, trends move in “Action and Reaction” Cycles or movements and when price is extended far away from a falling moving average (like the 20 day), the next move is usually a swing or retracement back toward this average.