WTI Price Analysis: A bid-upmarket runs into a cluster of resistance levels

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  • WTI has triggered the bear’s appetite in a supply zone.
  • Market structure is expected to contain the bullish price action and focus remains on the downside.

There has been a price action development in WTI which has triggered a bearish trade setup according to the analysis in the following article:

WTI Price Analysis: Bears licking their lips for a 1:5 R/R swing-trading opportunity

4-hour structure

The price has broken to the upside convincingly, which is not ideal, especially considering it has closed above the entry area between 39.67/99 (structure).

However, encouragingly, and preventing one to take profit for a breakeven (when price travels too far beyond structure post triggering the entry order), the price has done what might be expected of it. 

As explained in the prior analysis, there are no surprises in this movement. 

In fact, the setup allowed for such a scenario. 

The price has, as foreseen, run to test bearish commitments in the 40 area and has chipped into the resistance of the wedge formation’s counter trendline.

However, it is still unfortunate to see such a firm close above structure.

Failures at the extended trendline resistance would be expected to result in further supply and an eventual break of the support structure. 

Beyond the trendline resistance, there is a final layer of horizontal resistance that could be the last uncomfortable stop in drawdown before the safety-net of the stop-loss and the 41 area. 

Once the support structure is broken, the next hurdle will be the 38 figure’s daily support structure.

The following expected price action could play out, albeit comfortably well below a breakeven stop loss and protected by new resistance structure:

Trading is supposed to be reactive, not predictive.

However, “it is better to be prepared for an opportunity and not have one than to have an opportunity and not be prepared,”

– Whitney M. Young Jr.

In a final note, trading is NEVER supposed to be ‘uncomfortable‘ as a trading plan should cater for all scenarios, comfortably. Losses are integral to trading and come with the territory.

Uncomfortable‘ has been used in this article for lack of a better word. 

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