A very interesting scenario appeared in the market. Oil, after a strong six-month rally, consolidated at $ 50. In this situation, the bulls are trapped at $ 57 because there are no more profitable technical highs buyers can set their limit on.
Therefore, long positions are not recommended because in this case, you will have to place stops in the same place all buyers did in the last 2 weeks, thereby trapping you in the market. Instead, what you should do is to open a short position when the quote breaks through $ 57.
Of course, you still need to be careful because the market is unstable. Make sure that your approach is correct so that you will gain profit.
Anyhow, this situation happened because OPEC decided to raise production starting May. US also managed to form a new nuclear deal with Iran.
(The plan above follows the classic and trusted Price Action and Stop Hunting strategies. Good luck!)
The material has been provided by InstaForex Company – www.instaforex.com
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