Crude Oil Bear Trap Long Signal: 7/21/15

Crude oil potential Bear Trap long signal on 7/21/15

The first chart show the break of prior day's low with no follow-through. This is a sign that bears tried to short the break out down, but are now trapped short at those low levels. Historically, traps end trends at least for the short term to provide a leg up. If a BOT long occurs, this can be further fueled by short covering (even though there are no fundamental reasons for price to advance).

Horizontal lines are OP pullback retest levels. A pullback to OP with a break of prior day's high would confirm the BOT long signal which is strengthened by the Bear Trap if it holds and we trap at / above OP.

Second chart shows trend line that will trigger BOT and target zone (horizontal green line) due to OP of down move from June 26th.

What is an OP?

OP stands for origination point. It is the level / point where an up move or down move started / originated from.

Long confirm: Pullback to OP with a Break of Trend (BOT Signal- detailed in earlier post)*

Target: Approximately $9.00, over 17% to upside. Around OP of down move starting June 26th.

Stop: @ July 21st 4:00am low of day.

*If there is no pullback to OP, we would be looking at entry on BOT following failed short.