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CFD: Ideas You Can Trade - USOil 54.00 Upside Resistance Nearing

Posted by Steven Hatzakis on Apr 14, 2015 3:59:00 PM
USOil: Ceiling of 54.00 remains upside barrier to bullish continuation over the very short term

The medium term daily candle chart below shows the price history of USOil, a Contract for Difference (CFD) that aims to track the underlying spot price of US Crude Oil. Today this CFD is trading near 53.13 and just off session highs of 53.68 around time of publication.

Last week when USOil was last reviewed in Ideas You Can Trade the same issue was at hand - with resistance near 54.00 putting selling pressure on rising prices. Now that prices have moved back towards this upside barrier - a breakout or reversal could follow as 54.00 approaches.

If a break above 54.00 follows then a sharp bullish continuation should help lift USOil towards 57.00 whereas a failure to hold above 54.00 or to even reach it - should cause a sudden sell-off with prices returning towards 50.00 in the short-term or coming days/weeks ahead.

Therefore, 54.00 remains a level of interest to watch, and as the recent bullish trend line that USOil has been ascending (see green line on chart below) will either fail or prevail over the next few days as its trajectory points towards this price.

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

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 54.02 with a Limit to take profit @ 56.98 and a stop-loss @ 51.99 Risk/Reward Summary: Limit risk = +296 points profit /(-203) Stop-loss risk = Gain to Loss ratio = 1.45

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 51.18 with a Limit to take profit @ 50.19 and a stop-loss @ 51.88 Risk/Reward Summary:  Limit risk = +99 points profit /(-70) Stop-loss risk = Gain to Loss Ratio = 1.41

Daily Candle Chart:

USOilDaily April 14 2015 note


Topics: commodity, CFD trading, Crude, US Oil, technical analysis, cfd, WTI, USOIL, West Texas Intermediate crude oil, West Texas Intermediate, $OIL

 

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