Crude Awakening Coming To Shorts? United States Oil Fund (NYSE)
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 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