Oil rise , Price in channel, bounce off MA, stochastics down --> $540 profits
5 min Emini Nasdaq 100
Hi,
Today was a down trend day... Price gapped down and never really got to close it... you can see huge swings in stochastics and market was generally volatile... When price first broke the moving averages without closing the gap, we can tell that chances are it will continue to trend down... I did not enter because of the overall volatility and I couldn't tell where price will bounce back.. there was no good signal for entry...
At around 14:30, price touched the moving averages and rebounded downwards... At the same time stochastics turned sharply down from the overbought region... This was a good risk/reward trade in that I could place my stop loss just above the moving averages.... I shorted 1 contract at 2142 and another 2 more contracts at 2133 when price broke the low formed by the earlier session... I exited only at 2127 when stochastics turned up and price seemed to bounce back from the support line formed by the channel.. profits of $540.
Fundamentals:
Oil futures rose Thursday after the government reported larger-than-expected declines in crude and heating oil inventories.
In its weekly inventory report, the Energy Department's Energy Information Administration said oil inventories fell by 3.3 million barrels last week, more than double the 1.3 million barrel decline analysts expected. Inventories of distillates, which include heating oil and diesel fuel, fell by 2.8 million barrels, much more than the expected drop of 800,000 barrels.
"(Heating oil) stocks are just plunging," said Stephen Schork, a trader and analyst in Villanova, Pa.
Crude and heating oil supplies have declined more than expected for several weeks running, exacerbating a perception that supplies may be inadequate to meet winter demand.
Light, sweet crude for February delivery rose 65 cents to settle at $96.62 a barrel on the New York Mercantile Exchange after rising as high as $97.79. Heating oil futures for January delivery rose 3.91 cents to settle at $2.6803 a gallon.
Oil prices also rose on news of the assassination of Pakistani opposition leader Benazir Bhutto and a vow by opposition politician Nawaz Sharif to boycott parliamentary elections next month, which raised concerns about geopolitical stability. Sharif also demanded that President Pervez Musharraf resign immediately.