close icon

“Sell and Hold” Crude Oil Strategy

In our previous article you saw that a bearish reversal in the price trend of crude oil could be predicted, even when OPEC extends its production cuts agreement, which should normally be a bullish factor. It has been roughly 20 days since that post and oil’s plunge shows no signs of stopping. After falling to as low as $44.21 yesterday, the commodity is currently trading close to $44.70. In this article you will see how the Elliott Wave Principle provided us with a simple “sell and hold” strategy to follow.

Before the market opened on Monday, May 29th, the following chart of crude oil was included in the weekly analysis and sent to our subscribers.(some marks have been removed for this article)
crude oil chart 1
As visible, since we thought oil has changed direction, it made sense to use the top at $51.97 as an invalidation level for this count. As long as this level was intact, more weakness should have been expected. A week later, before the open on Monday, June 5th, the chart of WTI crude oil looked like this:
crude oil chart 2
$51.97 was never tested. Instead, the bears applied enough pressure to force the oil’s price to continue declining. On June 12th, we could move the stop-loss level by nearly $3 a barrel down to $49.15, thus locking in some profit and still be in the trade. By the time we had to send the next issue, crude oil bears had managed to conquer new territories.
crude oil chart 3
On Friday, June 9th, the market closed at $45.87. Before the open on June 12th, our new invalidation level was $48.37, while keeping the negative outlook on oil’s short-term prospects. Today is June 16th and the updated chart below shows the sell and hold strategy was a good choice.
crude oil chart 4
$48.37 was never in danger and crude oil prices are now approaching the May lows near $44 a barrel. Riding the selloff would have been impossible without the Elliott Wave analysis, of course, since it provided the necessary trust in the bears’ abilities to keep the downtrend in progress.



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

You may also like:

WTI Crude Oil Knocking on a Major High’s Door

Between January 25th and February 9th, WTI crude oil’s price plunged from $66.62 to $58.06 a barrel, losing 12.8% in just 12 trading days. What the bears did in just over two weeks, the bulls needed a month and a half to recover from. Finally, oil prices climbed to $66.52 earlier today, following last week’s…

Read More »

USDCAD and Crude Oil Abandon Negative Correlation

Between 2000 and 2016, USDCAD and crude oil had a negative correlation in 93% of the time. Canada is one of the world’s biggest oil producers and the largest oil supplier to the United States. So, when U.S. demand for oil rises, demand for Canadian dollars rises, as well, thus hurting the USDCAD exchange rate.…

Read More »

Crude Oil Finally Reaches the $60 Mark

As WTI crude oil approaches the $60 mark, we could conclude that it was not a smooth ride at all. The price has been wandering between $55 and $59 for nearly two months until it finally broke out of this range to reach levels not seen since late-June, 2015. A month ago the price surpassed…

Read More »

Ahead of WTI Crude Oil’s Two-Year High

The price of WTI crude oil surpassed the $58 a barrel mark this week. The last time it traded at that level was in June, 2015, when the oil crash was still in full swing. Almost two and a half years later, the bulls’ efforts are finally being rewarded. It has not been a smooth…

Read More »

Crude Oil Ignores Hurricane Nate and Slips

Here we go again. The last time hurricanes had something to do with crude oil, the price of the commodity, according to popular media, was rising because producers were bracing for Irma, whose record-breaking winds were going to severely disrupt production. That at least made sense at the time. Now, oil producers are preparing for…

Read More »

Crude Oil Finally Rewards Stubborn Bulls

If you were bullish on the price of crude oil, last week was nothing short of wonderful for you. The commodity opened the weekly trading session at $47.57 and after a small dip to the round number of $47, it climbed to as high as $50.47 a barrel, exceeding the previous major high of $50.40,…

Read More »

Crude Oil on the Path of the Hurricanes

As if Harvey was not enough, the United States now braces for Irma, which in turn is expected to be followed by Jose and Katia. Irma is considered to be the strongest hurricane ever to hit the shores of the U.S.. Its winds are blowing at speeds higher than 185 mp/h (300 km/h), enough to…

Read More »

More analyses