Over the last month we have seen the price of Crude Oil sell off about 10%. If someone was living under a rock for the last several weeks, they would think that geo-political tensions were easing and not escalating. Well, for whatever reason, the price has come in and is presenting traders with a compelling risk/reward trade to the long (up)side. I have included a weekly chart of crude oil below, and as you can see there is a fair amount of support at around the $96 level. That is where the 200 weekly MA (moving average) resides, and more importantly, an up sloping trendline. That line is pretty important as it has acted as support back in April 2013, and again in January 2014. While I have used the Light Sweet Crude Futures chart, traders can also use the popular United States Oil Fund LP (ETF) (NYSEARCA:USO) to take this trade. Traders can enter this long trade at around $96 and could expect a bounce back up to the $100 level. The stop on this position would be the first daily close below the trendline, or one could use $95 as the stop. This would set up a $4 upside potential bounce, and the risk would be only $1. Use this chart to take your cues as to on when to enter and exit this trade, with such trading vehicles as the United States Oil Fund LP (ETF) (NYSEARCA:USO). For live market insight and alerts exactly when we enter and exit positions on trades like the USO and more... step inside the Elite Round Table and enter profitable trades live with us. You can also join our FREE market moving email list to get free updates ONLY when important action is happening. We look forward to having you join us as we navigate the markets and make money! Parm Mann Elite Round Table Follow me on twitter: @ParmMannTrader Join the Elite Round Table on Facebook
I am long a bit of oil as well, but this trade has been getting crushed by the rise in the dollar. It's obviously oversold here, but I'm starting to get a little nervous that the euro decline is going to extend that trend even a little further. A tight stop seems in order here.
Thanks for posting that. I am long as well and in a fair drawdown. Glad to see a few green candles today, hope it carries on like that. Nice to see some chat about it. Any relevant info/ideas, I am up for that.
Not sure if you are a trader or investor but I posted a very important SPY tredline to watch for...I posted that one on Stock Message Boards forum here. You can follow me on twitter as I post trade ideas and articles all the time although I am new to this site.
Yes, I am a trader rather than investor. Sharing ideas and 'noticing' things is very important. Nice to bounce ideas. Thanks
Yep, I'll link up. Thanks. As a rough description, I tend to trade WTI by mostly shorting above 100 and buying below. Layering trades in, small to start and getting larger as necessary, (careful of money management though... don't want a margin call) and taking profit on the rebounds. Similarly buying under 100. That may suit some people, I like it and it works for me. I trade against spikes, large movements normally retrace.
I actually decided to cut my losses here and sold into the close. Getting such weak bounces given how oversold we are. I think I'm going to wait for some more convincing action before I get long again.
