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CFD: Ideas You Can Trade - USOil Turned Very Bearish Today

Posted by Steven Hatzakis on Jul 6, 2015 12:54:00 PM

USOil: Trend turned bearish very fast after 58.00 lost and with steep dive to 53.00 today. Trajectory points towards 40.00 in 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. This CFD is trading near 53.24 around time of publication - after falling from 58.00 since last *Wednesday [*Corrected from: within the last 24 hours.]

USOil was last reviewed at the end of June in Ideas You Can Trade  when support was tested again -and the trend was described as range-bound and with a break-below that being very bearish. 

Yesterday ahead of the market open USOil lost support on 58.00 and has dove steeply towards current prices and seems within a steep bearish channel, and signaling an overall change of the trend into a more bearish trajectory. On the additional weekly chart below the 2015 lows just above 40.00 seem within close reach at this pace.

While a lower low seem more likely now, a small recovery could preceded such a continuation, yet the overall momentum should stay bearish - considering the size of the drop - unless 58.00 is regained very quickly (which seems unlikely).

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

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 55.60 with a Limit to take profit @ 56.00 and a stop-loss @ 55.20 Risk/Reward Summary: Limit risk = +0.40 points profit /(-0.40) Stop-loss risk = Gain to Loss ratio = 1.0

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 52.99 with a Limit to take profit @ 51.85 and a stop-loss @ 53.99 Risk/Reward Summary:  Limit risk = +1.14 points profit /(-1.00) Stop-loss risk = Gain to Loss Ratio =  1.14

Daily Candle Chart:

USOilDaily July 6 2015 note

Weekly Candle Chart:

USOilWeekly July 6 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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