Trade of the week: short WTI crude oil
We would like to go short WTI crude oil at $77.10 with a stop loss at $79.10 and a downside target between $74.00-to-$73.00.
(Partial video transcript)
Previous trading outcome
Axel Rudolph: Hello and welcome to this week's "Trade of the week" on Monday the 13th of January, 2025. Last week we went long the Tesla share price and we did so because we saw an ABC corrective move. And I might not have mentioned that that only works half of the time. But we like to put these trades on because basically when you get it right, you have a far greater profit potential than when you get it wrong. You have a relatively small loss.
So, let's just look at that chart. And you can see here the Daily Financial Bet for a Tesla. And you can see that ABC correction the zig zag correction to the downside. And we went long just above here, at around $417.00. But our upside target was around $500.00. And so far, unfortunately, as you can see, we did go up slightly on the next day but since then we've come down. We haven't been stopped out. Our stop loss is below the 2nd of January low, just down here. Because that's the end of this ABC correction if it is indeed one. So that stop loss is still in place at $413.10. So, there's nothing else to say on this trade. It is still in play.
This week's trading opportunity
Now this week, what I would like to do is, to go on to another chart. Let me just go up and look at crude oil. Everything's gone up with regards to crude oil. As you can see, we've had a very nice rally to the upside since December. And at the moment we're still bullish. But I feel that we might be heading into a resistance area here. You can see we've got the highs going back to November December of last year. And they might cap the upside in the short-term.
So because, if I move from a daily chart to a weekly chart, because the trend, as you can see here from last year, is still pointing down, even though we've broken through this downtrend line, we haven't yet taken out the high from December. So this high, let me just go back onto the daily chart, this high comes in at the at around $78.00. And we are trading quite close to that now, at the moment.
And I believe that that high combined with the previous highs here, and also the lows going back to earlier last year, is probably going to act as a resistance area. And we might see a retest of this breached downtrend line before we move to the upside. And that's why I want to go short the WTI oil price here on this Daily Financial Bet.
So today's "Trade of the week" is to go short WTI crude oil at around $77.00 with a stop loss above $79.10 and a downside target between $73.00 and $74.00.
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