Crude Oil (@CL) broke lower at resistance with stocks this morning.
Let’s overlay a Fibonacci Retracement Grid and plan the key levels and opportunities right now:
We were targeting the $34.00 level (a Daily Chart target) after the intraday V-Spike Reversal on January 20th.
Price waved its way up to that target, giving a few short-term bull flag (buying the retracement) trades on the way higher.
Negative divergences appeared into the $34.00 level and price turned down Friday.
This morning we saw a downside gap and break of a rising (blue) trendline as drawn.
The immediate target is the 38.2% Fibonacci Retracement – highlighted – at the $32.00 per barrel level.
With this level successfully achieved, we’re seeing price break this level on a possible pathway lower.
For traders, we’ll look to play bearishly with price under $32.00 to target the 50% retracement at $31.00… and if price fails (breaks under) $32.00 then we’ll look for an ongoing retracement all the way toward 61.8% which is the $30.00 key reference level.
Whatever short-term strategies you’re using currently, look to this Fibonacci Grid (and the trendlines) for clues.
For more daily updates from Corey, visit his blog at Afraid to Trade.com.