Was the adage "buy the rumor, sell the news" also verified with that new trading position?
It was Thursday (Nov. 4) that the following rumor had flourished: a possible coordinated action which was supposed to consist of drawing on the strategic oil reserves of several countries, including the United States, which were leading the dance.
Meanwhile, our subscribers were just getting ready to go long around the $76.57-79.65 support zone (yellow band), with a stop placed on lower $76.48 level (red dotted line) and targets at $81.80 and $83.40 (green dotted lines).
As a result, oil prices had contracted in stride (trading just into our entry area), just before the rumor effect faded shortly on Friday (Nov. 5), to push them back up.
In fact, with oil prices picking up momentum on Friday, once again settling firmly above $80 per barrel, and with a market still showing doubts on the possible use of strategic crude reserves, the proposed trade entry on the black gold, triggered on Thursday – following my last post – was thus profitable since it already turned into a partial profit-taking at the end of the week.
Then, on Saturday, Joe Biden said that his administration had the means to cope with the rise in energy prices, in particular after the OPEC+'s decision not to raise their production to more than 400,000 barrels per day. in a context of global imbalance between supply and demand.
In addition, Joe Biden also insinuated that the organization (and its allies) might actually not do its best to pump enough volume of crude oil.
Trading Charts
Now, let’s zoom into the 4H chart to observe the recent price action all around the above-mentioned levels of our trade plan:
In summary, my trading approach has led me to suggest some long trades around potential key supports, as this dip on crude oil offered a great opportunity for the bulls to enter long whilst aiming towards specific projected targets.
Stay tuned – happy trading!