Oil is ready for another plunge soon

Early this year when oil was over $100, I predicted that oil was due for a severe decline. It did and dropped to below $80. Then late Jun I thought oil was due for a bounce back and I was even played with this idea with my own money (see here). Again it behaved as I said. Unfortunately I did not have enough time to play this to its full capacity due to my trip to Australia/New Zealand. I did not want to risk my profit by holding the very speculative short-term trading while I was away. So I closed my position of UCO with only a small profile of over $1000.

Now Oil has fought back fiercely and come back to over $90. I think oil is due for a severe decline again. Why? Because the fundamentals do not support such a strong oil price, period. It may further climb a bit but I don't think it will be long before it resumes its downtrend. Technically it also argues for a drop of the oil price. Two months ago when I called for a bounce, the oil price was 20% below its 200 days moving average (red line). Now it has come back so much that it is very close to its 200d MA, which now serves as its resistance. Likely it will start to plummet when coming back to this strong resistance line. I'm thinking to play again with this idea but this time of course to bet its decline.