USOil: Back in Bearish Territory with 102.50 Next Possible Support Line
The daily candle chart below shows the price history of USOil over the medium term, and trading near 103.38 around time of publication today.
This Contract for Difference (CFD) aims to track the price of US Crude Oil, and was last reviewed in the Ideas You Can Trade series at the end of June, when USOil had reached the lower band of a trading range, and since had a breakout to the downside of that trading range.
Following the drop from 105.00 when support was lost, a medium term bullish support line also appears to have failed to stop the downward momentum, and USOil may be looking for support closer to 102.50, although 103.00 could also provide some short term assistance.
Trader's may be watching to see if the bullish trend lines (point 4 in green on chart below) intersecting just below current levels (as seen on the chart below) may provide any support, or whether the short term bearish trend lines (point 1 on chart in magenta color) that have been guiding the current trajectory will hold.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 104.16 with a Limit to take profit @ 104.71 and a stop-loss @ 103.78 Risk/Reward Summary: Limit risk = +55 points profit /(-38) Stop-loss risk = Gain to Loss ratio = 1.44
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 102.88 with a Limit to take profit @ 102.51 and a stop-loss @ 103.21 Risk/Reward Summary: Limit risk = +37 points profit /(-33) Stop-loss risk = Gain to Loss Ratio = 1.12
Daily Candle Chart: