Daily chart: It seems crude oil has found support in the area delimited by the 0/8 line (blue line) and the bottom line of its trend channel. However, we must be careful as the price could fall below 93.75 until it finds a new support line on the extreme of -2/8. Therefore, we can enter selling below 93.75 and buy above this point stop with loss reduced from about 60 pips in both cases. In the next few hours Management of Energy Information (EIA) will release the crude oil inventories for the week of January 3 and it is expected that the data will move the market in either direction.
4-hour chart: Considering the volatility of the light crude oil and the dominant trend of the moment there is a high probability that the prices continue to fall below 93.75. Therefore, we can continue selling below this level with a take profit in 93.20 with a minimum risk of about 40 pips of the current price. The stochastic also seems to confirm the bearish sentiment and descending below 50 points this trend will be confirmed.
1-hour chart: In the 1-hour chart of the nearest support is found in rates EUR 92.00 dollars. On the other hand, the moving average of 200-days in this time frame has been showing signs of reversal and a change of direction, which would tell us that we are facing an imminent upward swing in the medium term. Finally the index of relative strength RSI still shows us that there is force on the part of the sellers however the same tends to decrease and in the area of rates EUR 92.00 could be your last stop. We can therefore take advantage enter short below 93.75 with stop loss of about 30 pips above the line.
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