USOil: 58.00 next down-side support target, after trading in sideways range after exiting bullish channel
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 58.34 around time of publication - and near fresh sessions lows.
Last time USOil was reviewed in Ideas You Can Trade earlier in on May 11th, the bullish channel had already been exited and an attempt to regain it subsequently failed.
Since then USOil has traded sideways, within a range between 61.00 and today's low, and appears to be bearish again and making lower-lows since the last mentioned post.
If today's low of 58.32 holds then a rebound could follow, whereas a breach would swiftly see support on 58.00 revisited. Less bearish traders may wait for a break under 58.00 before entering short, whereas a bounce from that line could be an entry for bullish traders. Otherwise, less bullish traders may wait for 59.00 to be regained before entering long to buy.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 59.01 with a Limit to take profit @ 59.55 and a stop-loss @ 58.55 Risk/Reward Summary: Limit risk = 54 points profit /(-46) Stop-loss risk = Gain to Loss ratio = 1.17
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 57.99 with a Limit to take profit @ 57.53 and a stop-loss @ 58.38 Risk/Reward Summary: Limit risk = 46 points profit /(-39) Stop-loss risk = Gain to Loss Ratio = 1.17
Daily Candle Chart: