Oil prices fell 5 percent on Monday, causing WTI to fall below USD 50 a barrel for the first time since 2009. A stronger US Dollar and excess oil reserves are fueling the decline as OPEC continues to exceed production targets for the seventh month in a row. Steve O’Hare from First 4 Trading is maintaining his bearish view on oil as the market continues to search for a bottom.

Late buying activity on Monday afternoon has created a selling opportunity according to Steve, who is targeting a drop to USD 46.10. Selling resistance is indicated around the USD 51.20 level by Monday’s bearish Marabuzo candle. Additional resistance is located near USD 51.75 according bespoke resistance and the 38.2 percent Fibonacci retracement marker.

Initially, Steve is looking to sell at USD 51.20 as well as USD 52.00. His three targets for this trade are: USD 49.70, USD 47.50, and USD 46.10. A stop can be placed at USD 52.60, and any move above this key level could challenge the recent reversal at USD 55.

Join the conversation below to be a part of the social trading experience.

Non-independent investment research disclaimer

Full disclaimer