Shorting Oil futures - Wave/4B down
Correction 4A of wave-3 finished @ $34.66
I expect a double top to form as shown on chart or at least an H&S.
Compile a 3 contract short position:- half of the position in the <$33-$34 zone> & the other half in <$34-$34.6> zone.
place limit sell 1/2 contract @ $ 33.10
place limit sell 1/2 contract @ $ 33.40
place limit sell 1/2 contract @ $ 33.70
place limit sell 1/2 contract @ $ 34.00
place limit sell 1/2 contract @ $ 34.30
place limit sell 1/2 contract @ $ 34.60
Targets 700 pts away @ 50% of the ending diagonal of wave-4A = < $25.5-$26.25> = (correction of wave-C in ending diagonal).
Place Buy stops for 3 contracts at $35 to hedge the position instead of placing SLs. The total Risk for the position is thus -$1150 / contract on average, if the hedges open & -$3450 for all three contracts, on open hedging.
-$3450 equates to 17.5% Risk on an $ 20000 Account. If the Account is $ 10000, half the position size to 1 1/2 contracts divided respectively at shown entries.
There is a possibility on breakout of negative corona virus / unlock feed back for this wave 4B to turn into an impulsive- 5th instead to truncate somewhere below $10.
Take Good Care & Stay safe
I expect a double top to form as shown on chart or at least an H&S.
Compile a 3 contract short position:- half of the position in the <$33-$34 zone> & the other half in <$34-$34.6> zone.
place limit sell 1/2 contract @ $ 33.10
place limit sell 1/2 contract @ $ 33.40
place limit sell 1/2 contract @ $ 33.70
place limit sell 1/2 contract @ $ 34.00
place limit sell 1/2 contract @ $ 34.30
place limit sell 1/2 contract @ $ 34.60
Targets 700 pts away @ 50% of the ending diagonal of wave-4A = < $25.5-$26.25> = (correction of wave-C in ending diagonal).
Place Buy stops for 3 contracts at $35 to hedge the position instead of placing SLs. The total Risk for the position is thus -$1150 / contract on average, if the hedges open & -$3450 for all three contracts, on open hedging.
-$3450 equates to 17.5% Risk on an $ 20000 Account. If the Account is $ 10000, half the position size to 1 1/2 contracts divided respectively at shown entries.
There is a possibility on breakout of negative corona virus / unlock feed back for this wave 4B to turn into an impulsive- 5th instead to truncate somewhere below $10.
Take Good Care & Stay safe
Note
$33.1 & $33.4 &33.7 filled so far.Note
$33.1 & $33.4 &33.7 & $34 filled so far.Position Average $33.55
Add Buy stop for 1 1/2 contract at $35 Target 38.9 (To fill the gap showing on charts)
This addition is a "zero hedge" policy, in case price breaks above $35 & continues on a bull run targeting the gap at $40. In that case enough money would be made by the 1 1/2 additional long contracts to enable liquidation of the position as a whole <$33.5 shorts vs $35 longs> at NO loss to the account.
Note
all limit shorts filled to average holdings short at $ 33.85Raise TP to $ 26.80 = $ 7/contract
Note
Price made $ 32.16 Take SL to B/E for all short holdings (break even inclusive comm costs should be ~ $ 33.80)
Remove all buy stops / protection hedges
TP remains the same @ $ 26.80
There could be a bounce at the H&S neckline <31.30-30.80>. Its discretionary to take profits there & reload shorts in the Right shoulder of the formation.
Note
Close all holdings (Take profit) at market $ 31.35= $ 2.5 / Standard contract
This should amount to $ 3750 (1 1/2 contracts) on an $10000 account & $ 7500 (3 contracts) on an $ 20000 account.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.