USOil: Sideways market as support on 58.00 enabled another bounce higher to 61.49 today - yet bearish barriers remain
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 60.47 around time of publication.
Last time USOil was previously reviewed in Ideas You Can Trade was at the end of May when support on 58.00 had been lost. While the outlook was bearish - support was quickly regained and prices have been range-bound and mostly sideways since then reaching as high 61.49 today.
The May high near 62.50 is within close reach and may be the next upside barrier where resistance exists if today's high is surpassed. More likely if the trend continues sideways, then prices should return towards support above 58.00 - unless the trend is ready to change.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 61.50 with a Limit to take profit @ 62.49 and a stop-loss @ 60.75 Risk/Reward Summary: Limit risk = 0.99 points profit /(-0.75) Stop-loss risk = Gain to Loss ratio = 1.32
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 59.89 with a Limit to take profit @ 59.01 and a stop-loss @ 60.50 Risk/Reward Summary: Limit risk = 0.88 points profit /(-0.61) Stop-loss risk = Gain to Loss Ratio = 1.44
Daily Candle Chart: