January micro WTI crude oil (CLF26) futures present a selling opportunity on more price weakness.
See on the daily bar chart for January Nymex crude oil futures that prices are trending lower and have just hit a 4.5-month low. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bearish posture as the red MACD line is below the blue trigger line and both lines are trending lower. The bears have the near-term technical advantage.
Fundamentally, concerns are rapidly growing over a global crude oil glut in the coming months. The International Energy Agency today issued a warning that the glut may be more than originally expected. Heightened U.S.-China trade tensions and their sanctions on each other threaten to limit global economic growth.
A move in January crude oil futures below chart support at $57.00 would become a selling opportunity in the micro WTI futures. The downside price objective would be $48.00, or below. Technical resistance, for which to place a protective buy stop just above, is located at $61.00.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
