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Crude Oil Double Top Setting Up?

ByDay Traders Group
Published 08/19/2021, 12:03 AM
Updated 07/09/2023, 06:31 AM

In the short term a potential Double Top

A potential double top in crude oil could be setting up with the price of crude testing the "neckline." Any close below that neckline would "confirm" the potential Double Top as a valid pattern, should price close below the neckline. That hasn't happened yet, however, options investors could be positioning for a break down according to recent options alerts data.

Here's the visual:
Oil Chart
Crude oil got rejected at the 61.8% Fibonacci confluence drawn from the Christmas 2020 highs to the May 2020 lows/ A close below the neckline would also increase the likelihood of a 200 day moving average and Fibonacci confluence re-test near $59 or less per barrel level.

Any close below the 200-MA would leave crude oil vulnerable to a re-test of the January swing lows. Options data shows that options traders are gravitating toward the the Jan. 22 and October (NYSE:USO) put options with the 40 and 43 strike respectively.

This article was originally published on The Day Traders Journal

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