It took a while, but Crude finally reached our target of 54.45 and even traded higher.
The high so far was 54.90.
As you can see on the chart the technical indication is that Crude is a little overbought.
Next upside target is 55.60.
The suggestion is – it might be a little early – to short Crude at the market with a tight stop at 55.60.
So, what is the idea and why can we not wait until Crude reaches 55.60?
The answer is that we look at the risk reward ratio and the overall technical model.
So yes, there is a chance that Crude will first reach 55.60 before correcting but there it is more likely that we will go down from here.
Then calculating the short-term upside or downside targets makes us believe that it gives a good probability to enter the trade.
Technically Crude needs a close below 53.80 to cancel its buy signal.
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