I want to provide an update on the WTI Crude Oil trade setup from May 28th "Crude Oil Update." Back on the 28th, I anticipated the formation of one of my favorite technical trading patterns, the head and shoulders.
Back then, I suggested we wait to see if the right shoulder formed before taking a short position in crude oil (USO, quote). Well, patience has rewarded us today with not only the formation of the head and shoulder but a convergence of the pattern with global fundamentals. Right now price testing the pattern and if it holds we should see crude oil price begin to move lower.
This afternoon, I put a working order in for USO Jul14 37.50 PUTs for .52 and will look to take profits at the 50% ,100% and 150% profit levels. I will exit on the downside at the 50% level.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.