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CFD: Ideas You Can Trade - USOil Hits New Year-To-Date Low

Posted by Steven Hatzakis on Sep 22, 2014 1:20:00 PM

USOil:  Support Moves Lower After Prior Target Reached

The daily candle chart below shows the price history of USOil over the medium term. This Contract for Difference (CFD) aims to track the spot price of US Crude Oil, and is currently trading near 90.82 (around time of publication today).

 Earlier in September in the last post about USOil in the Ideas You Can Trade, 91.21 was described as the next target in the downtrend, and has since been reached.

The downward momentum has caused support to move just under the prior year-to-date (YTD) low - to 90.40 on September 11th - and now to a fresh YTD low today of 90.37.

With USOil trading already near that new YTD Low in today's session, further price action below this level should be bearish, whereas a recovery would indicate that the low reached earlier in September - around similar levels - could indicate a new floor in the downtrend. However, for now USOil still looks bearish, and could be prepping for a larger drop.

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

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 91.71 with a Limit to take profit @ 92.25 and a stop-loss @ 91.41 Risk/Reward Summary: Limit risk = +54 points profit /(-30) Stop-loss risk = Gain to Loss ratio = 1.8

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 90.21 with a Limit to take profit @ 89.75 and a stop-loss @ 90.65 Risk/Reward Summary:  Limit risk = +46 points profit /(-44) Stop-loss risk = Gain to Loss Ratio = 1.04

Daily Candle Chart:

USOilDaily september 22 2014 note

 

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

 

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