Crude oil's trading range provides a great opportunity.
Crude traded surprisingly well late in the day yesterday, after clearing stops below Wednesday's $90 low.
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Crude continued to the upside even as the dollar continued higher — likely on speculation of more asset purchases by the Bank of Japan. This did not end of happening, and the non-event actually pulled the dollar back slightly off of the highs, allowed crude to hold against its swing highs and current action at $90.75.
In the early hours of trading, crude failed against $91, and cleared stops below $90 after inventory reports. However, it in fact held this week's $89.33 low. This turnaround should lead to a test of major resistance at the $92 level, which now holds a large amount of volume to accompany the 100-day and 200-day moving averages.
So how should you look to trade crude?
The bottom line is to play the range: Buy against $89.33 with a tight stop, says Ilczyszyn.
But if the trade stops working, get out! Make sure to stay reality-based.