Crude oil inventories dropped 1mil barels last week according to EIA and are close to the upper band of the average this time of the year. However Gasoline inventories increased 1.5mil barels and are close to upper limit of the average range too. This may offset the expected increase in refinery demand and as a result we saw an intesive market reaction yesterday. Overnight the prices were pushed back to the support zone $50-52 which seems to be a great opportunity to buy. We were waiting for this correction for some time as the technical picture was pointing to the upside. Check Weekly Commodity from previous weeks: http://landoftrading.blogspot.cz/search/label/Weekly%20Commodity
ENTRY 2 units somewhere
btw $50.50 - $50.90
Stop 49.35 (risk in the range of $1.15-$1.55)
Unit 1 Profit
Target: $54.80 /RR 3.7- 2.5/ = if hit move stop to entry
Unit 2 Profit
Target: $56.80 /RR 5.4 – 3.8/
Why to buy?
Well medium term there are three main factors you should see fundamentally
- Still in the middle of the season of increased refinery demand
- OPEC meeting is scheduled for May25 and where an extention of production cut is expected to be agreed
- Geopolitical risks in Syria
What is the
main risk. The increase in US production could offset production cut.
Good Luck
and remember to watch your risk and be consistent
Mr. Tech Man
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This material was created for informational purposes only and represents the
Land of Trading team’s view of the past and current economic and capital market
environment. It is not an investment advice and should not be viewed that way
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