Intraday bias for crude oil currently remains bullish. As seen on hourly chart, market is testing the intraday resistance area at 53.57. As today’s trade plan, I would like to look for bullish setups confirmation on a pull-back move to within the support area at 53.23-53.02 in order to go long with 53.36 as target or 53.57 in extension. If no correction occurs, a break above 53.57 possibly will be followed by another bullish move up to 53.78-54.02.

Be careful if the market managed to break the support 53.02 because it will turn the intraday bias to bearish and possibly will push oil price down to 52.89-52.68.

Plan A: Buy within 53.23-53.02; target at 53.36 or 53.57
Plan B: Buy on break of 53.57; target at 53.78 or 54.02

Oil Chart:

2 thoughts on “Oil Remains in Bullish Bias”

  1. Wayne McDonell - TradersWay.com says:

    I like the setup, but only wish the target was 55 not 53.50. Why take the risk if you only think there is .50 cents on the table when you pony up a $1 for the trade.

    1. Eko Trijuni says:

      Hi Wayne, thanks for the comment. Nice criticism, in my opinion.

      Apologize, I don’t really understand what does the phrase “pony up” mean… English isn’t my native tongue. 😀

      However, if we are talking about risk to reward ratio, all we had to do was just look for a bullish signal confirmation if a pull-back move occurs to within the support area. The stop loss area would be around 53.02, or let’s say 53.00.

      Suppose we got a bullish signal confirmation at 53.15… the stop loss (SL) would be at 53.00 which equals to -$0.15/lot. The take profit should be more than $0.15/lot, if we are talking about good risk-to-reward ratio. In this case, if we put the take profit (TP) level at 53.57, the profit should be bigger than the risk. I would not recommend anyone to trade if the risk is bigger than the reward, I think it’s basic rule.

      Now, let’s talk about trading strategy. If the case was that I bought 1 lot of oil at 53.15 and my TP is at 53.57 (equals to $0.42/lot, bigger than the stop loss), I still need to watch how the market moves after that. We know that the market fell after I posted this analysis, but IF it went up, I might want to close my trade partially when the market reached 53.36 (0.5 lot for example), and let the rest reach the TP.

      What if the bullish signals confirmed when the price is at 53.23? Of course it would be a poor risk-to-reward ratio if I put the TP at 53.36. In that case, I still had to put the TP at least at 53.57.

      What if no correction occurred? The backup plan was to buy on break of 53.57, with 53.78 as 1st target and 54.02 as the 2nd. However, I should really consider to cut my position if the price went back to below 53.57 and closes below it. It means that if I use the breakout strategy, my SL is just below 53.57.

      I hope this clarifies. Please let me know if I miss your point.

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