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CFD: Ideas You Can Trade - USOil Downtrend Not Over

Posted by Steven Hatzakis on Aug 15, 2014 4:01:00 AM

USOil:  Breach Under 96.00 For First Time Since January

The daily candle chart below shows the price history of USOil over the medium term, and trading near 95.40 around time of publication today.

This Contract for Difference (CFD) - aims to track the spot price of US Crude Oil - and was last reviewed in the Ideas You Can Trade series earlier this month when the bearish trend had steepened.

Since then USOil traded as low as 95.23 - which was reached yesterday, and still appears bearish and caught in a downward channel.

From a longer term perspective, looking at the additional weekly candle chart below, USOil has not been able to regain the long term bullish support line and is still under it, where bearish pressure may push this CFD down to 91.21 which remains the year-to-date low reached earlier in January.

If the short term bearish channel that USOil is stuck within can be escaped to the upside, then a bullish continuation could occur although appears less likely than a lower-low first being reached.

Below are examples of how to trade a bearish continuation or a bullish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 97.62 with a Limit to take profit @ 98.53 and a stop-loss @ 96.80 Risk/Reward Summary: Limit risk = +91 points profit /(-82) Stop-loss risk = Gain to Loss ratio =  1.10

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 95.09 with a Limit to take profit @ 94.72 and a stop-loss @ 95.31 Risk/Reward Summary:  Limit risk = +37 points profit /(-22) Stop-loss risk = Gain to Loss Ratio = 1.68

Daily Candle Chart:

usoildaily august 15th 2014 note

Longer term weekly candle chart:

usoilweekly august 15th 2014 note

Topics: commodity, CFD trading, Crude, US Oil, technical analysis, cfd, USOIL

 

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