Pro: Crude Is Likely to Hit $78 by November
It seems crude oil is more likely to hit $78 a barrel than $100 a barrel by November.
November crude oil is trading just above the lows that were put in October 3. The chart setup is ugly and the fact that crude oil was unable to hold the 100-day moving average at $90.59 a barrel off Friday’s rally was very discouraging. It looks like shorts lightened up ahead of Friday’s jobs numberafter capturing a great move, but once the nonfarm payroll data came were released, traders had no problem reentering their shorts. This does not bode well for crude.
(Related: Rich's Best Oil Trade Yet.)
So what’s the game plan?
Sell Mortimer! Sell! But do so strategically. I’m looking to get short crude at the $90 level. A violation of the previous lows and the pocket that extends from $87.50-$87.10 could have crude testing this year’s lows. And that means $78 a barrel.
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