I shorted crude oil because the chart showed multiple indicators.
First, prior to the recent collapse just weeks ago, crude oil was trading in a range of $55 as a high, down to $52 lows. Since oil collapsed to $46, we have seen a technical bounce that touched the $52 on Wednesday. That's major resistance because it's the former low-end of the range.
The next factor is found on USO, the oil-tracking ETF. It tagged the daily 200 moving average on Wednesday after a massive bounce. In addition, the daily 50 moving average sits just pennies above, which signals a pullback — another signal to short.
Finally, oil inventories continue to build. The U.S. is producing more and more oil, killing any price pressure from OPEC's production cuts. Oil above $50 will only increase U.S production. I expect another leg lower on oil in the coming weeks to $40. I am short and enjoying the small risk to big reward.