For the last month, oil has been in a trading range between roughly 96/98 and 104. I have continually commented that until oil makes a move above or below one of those levels, it's best to sit on the sidelines. Yesterday, prices finally moved below key support:
Yesterday prices printed a strong downward bar. Additionally, the EMAs are bearishly aligned, with the shorter EMAs below the longer and all moving lower. The MACD -- which is already negative -- has also given a sell signal.
Yesterday's chart shows that prices took a major dive through resistance.
There are two options right now.
1.) Place a short a bit below yesterday's close. This positioning assumes prices will continue their move lower tomorrow.
2.) Wait for prices to rebound into an area of resistance and then short.
There are pros and cons to both approaches.
