Trading as high at 97.27 in 2014 the July Light Sweet Crude (CL) futures contract declined to 47.46 in March and has since rallied as high as 63.62. The problem is what's occurred after that.
A series of small lower highs and lower lows following the May high is creating a rounded top; a pattern that is slowly tipping the scales back in favor of the bears/shorts.
The price is at a higher swing high than it was in February. That provides some evidence of the uptrend. But just before the rally Crude put in the major low (a lower low). So while the long-term trend remains down, the multi-month trend is in question (expanding range).
With the price continuing to edge lower. Short is safer, with a stop loss above recent highs.
56.99 is the low point which started this rounded top pattern. If the price breaks below that the selling is likely to increase (see Top Factors that Move the Price of WTI Crude Oil).
Figure 1. July Light Sweet Crude (CL), Daily Chart
Going short though doesn't eliminate the upside potential or mean a trader can't participate if that situation develops. Since mid-May the price is moving in a small descending channel (right half of rounded top). Watch for a breakout higher. That could indicate the rally still has legs. Until then, keep stop losses just above those breakout areas to see if the selling kicks in with force.
For the short position the target is 51 to 50. Can be move lower in strong selling, but with the multi-month trend in question preference is given to the quick profit as there is some technical evidence the longer-term trend may be shifting. Based on the expanding range a more aggressive target is 47 to 46.