Energy traders were happy to see light crude oil rally on Tuesday. It's only too bad the gains were short lived. The American Petroleum Institute (API) reported a 2.9 million barrel build in its weekly inventory report Tuesday evening, and that's clearly not what bulls wanted to see. Following the after-hours report, crude dropped from near $37.90 all the way back to $37.20.
As most traders already know, we rely on the Department of Energy (DOE) report, released Wednesdays at 10:30 a.m., far more than the API data. For now, let's use $37.15-$37.30 (on the February light crude oil contract) as our support band. As long as price holds above that area, I believe a rally back toward $38 is in the cards.
Yelp (YELP) isn't a stock too many momentum oriented traders are following these days, but that may begin to change during the new year. The stock traded strongly through its 50-day simple moving average in early November, and following a pullback to that same reference point throughout the month of December, buyers appear to returning to the name.
Traders wanting to keep risk to an absolute minimum should use the five-day and eight-day exponential moving average as their near-term reference point for risk management purposes. Those willing to give the stock a bit more room might consider drawing a line near $25-$26. As long as price continues to hold within that one-handle area, I believe a bounce into the low-$30s is a logical expectation.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at firstname.lastname@example.org or posted to my twitter feed @ByrneRWS.