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CFD: Ideas You Can Trade - USOil Lower After 58.00 Lost

Posted by Steven Hatzakis on May 27, 2015 9:39:00 AM

USOil: Bearish channel emerging after support lost on 58.00 and low of 57.40 reached earlier today 

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 58.01 around time of publication.

Last week when USOil was previously reviewed in Ideas You Can Trade support was targeted on 58.00, and a break-below that price was forecast as bearish. Today that price was briefly lost and helped bring USOil to a session low 57.40. The trend is now becoming more bearish - and a down-channel may be emerging (see latest red parallel lines on chart below).

While 58.00 was just regained - around time of this writing - unless it is maintained a lower-low is likely, and if the emerging down-channel is validated then support on its lower line could be sought near 56.30 in the near term.

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

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 58.88 with a Limit to take profit @ 59.22 and a stop-loss @ 58.57 Risk/Reward Summary: Limit risk = +34 points profit /(-31) Stop-loss risk = Gain to Loss ratio = 1.09 

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 57.40 with a Limit to take profit @ 56.70 and a stop-loss @ 57.85 Risk/Reward Summary:  Limit risk = +70 points profit /(-45) Stop-loss risk = Gain to Loss Ratio =  1.55

Daily Candle Chart:

describe the image

Weekly Candle Chart (longer-term view):

USOilWeekly may 27 2015 LONGTERM

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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