- CL made a top last week and has since retraced 7.4%, giving potential entry opportunities.
- Key levels to watch for support and the 50% level at $93.76 for resistance.
- Looking for possible candlestick patterns on the retracement.
CL made a top last week of $95.03 and has retraced 7.4% since then. This is a welcome sight for traders who missed the move from $67.05 up to $95.03 as it gives possible entry opportunities, which we will look at now.
An upward-sloping trend line connects the low made in June to the swing low made in August. This line connects around the same price as the Fib 38% level if we draw the fib retracement from the high in June of last year to the low made this year. We can see that the bullish price action stopped in its tracks as it reached the 50% line last week, which indicates the connecting points for the Fib is accurate. Backtracking to the upward-sloping trend line and 38% Fib level could give possible long opportunities from there.
To take longs at that level, we would need to see a reversal candlestick pattern of some kind on the daily chart. A morning star, or a capitulation candle with high volume could be enough for us to take the entry and then place a stop below, defining our risk.
Levels To Watch
Critical levels are firstly the 38% level at $86.69. If that does not hold, then a bearish price target of $77.9 comes into play, but is unlikely at the moment. Bullish targets after a possible bounce is the 50% Fib level at $93.76, then the infamous $100 psychological level.
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