crude oil trades of tmwizard

Started trading crude oil futures again. I have traded Crude some time back in 2011. Thought of getting into action again in this area.

In this thread, I will log down my activities related to crude trades, which will include
  • related articles that i came across
  • my thoughts on the opportunities
  • my entries and exits
Instruments I trade (related to Crude):
Nymex Light Sweet Crude Oil Futures. Listed as CLxx or as WTI. Unless otherwise specified, I trade the near month contract.

My trading style:
Sometimes day-trading and sometimes swing.
Use a combination of Fundamentals and Technicals.

I always talk about the price of Crude in dollars.
This will be easier to follow as most news items/analysis on Crude are in dollars. (If you are comfortable only with the pricing in Rupees, the please do the USD->INR conversion.)
Have decided to short crude..

Saw this article yesterday:
3 main points mentioned in the article:
1. Crude inventories rose by 7.1 million barrels in week ending 23-Mar-12. Analyst expected a rise of 2.75 million barrels
2. France officials said that US, UK and France are discussing release of oil reserves in order to stem rising prices
3. Iran may hold talks with global powers over its nuclear program
Above fundamental reasons suggests Crude price would most likely go down.

Counter argument:
Just 2 days ago, Fed's Bernanke said that low interest rates and easy money are to stay for a longer period.. at least another 1 or 2 years.. This supports a lower dollar and hence will help crude prices to go up.
I agree with this. But, consider it to be the mega trend.
In the short term, I believe the price action will be based on the demand-supply fundamentals.

So, overall, decided to go short...

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Plan of action:

Target price determination:
Crude prices had rallied up from a low of 95.4 on 2-Feb-12 and reached a peak of 110.5 on 1-Mar-12. From then on, range-bound between 108.6 & 104. Fib retracement of 61.8 on the Feb rally points to a price of 101.2. So, I am looking at a target Buy of 101.5

Initial entry point:
Intra-day range for 29-Mar-12 was from 106.9 to 104.6. Though prices dropped $2.3, they climbed up to close around 105.5. I view this as a good entry point for my shorts. Go short at 105.5

Adding to the position:
When prices break below the low of current trading range (104), I would probably add to my short position. Of course, need to consider the fundamentals at that time.

Stop loss point:
On 29-Mar-12, the prices started sliding steeper after coming below 106.2. So, I am setting my Stop-loss Buy at 106.3
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What do you guys think about going short the WTI crude oil and at the same time long Natural gas futures? Or do some spread betting.

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