It doesn’t look that way at this time, so I’d expect oil prices to falter.
I would not be a buyer at this time.
However, a decline to the $40.00 range may make it more interesting to play the long side for speculators; albeit, the long-term chart shows very weak oil prices are possible.
If investors play the trend, there appears to be more downside risk at this time.
There are two possible strategies investors could consider: an example to play the downside could be via put options on an oil-based exchange-traded fund, whereas more experienced traders could consider playing the downward pressure on oil prices via the futures market.
This article is brought to you courtesy of George Leong.