USOil: Prices consolidated between a very-short-term bullish support line, and a short-term bearish resistance line
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 59.45 around time of publication - and lower as the trading week comes to a close this Friday.
When USOil was last reviewed in Ideas You Can Trade the May high of 62.50 was nearing and after support over 58.00 held prices higher, and the trend was described as range-bound between these prices.
Since then that sideways market has continued, and today USOil is stuck between a very-short-term bullish trend line (see green line on chart below), and a short-term bearish resistance line intersecting today's high.
Using today's candle as an indicator, a break under the bullish support line should help prices revisit 58.00, whereas a break-above today's high - which would be over the bearish resistance line - should help keep the short-term support line holding. Either way prices are squeezed between these two trend lines (coinciding near today's high/low) and one of which will break.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 61.01 with a Limit to take profit @ 61.40 and a stop-loss @ 60.69 Risk/Reward Summary: Limit risk = 0.39 points profit /(-0.32) Stop-loss risk = Gain to Loss ratio = 1.21
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 59.31 with a Limit to take profit @ 58.51 and a stop-loss @ 60.01 Risk/Reward Summary: Limit risk = 0.80 points profit /(-0.70) Stop-loss risk = Gain to Loss Ratio = 1.14
Daily Candle Chart:
Medium term daily candle chart zoomed-in: