Crude Oil (CL – USO) Bullish Setup

As I've seen too many divergent lows & breakouts above bullish patterns or resistance levels that only panned out for relatively brief & shallow rallies (if that), I'm not adding this as an official trade idea at this time but as I've received numerous inquires about crude oil recently, here's my take on CL (crude futures).  This is a 30-minute chart showing both a fairly well-defined downtrend line that currently comes in just below a decent horizontal support level around 32.25.

CL 30 minute Jan 12th

CL 30 minute Jan 12th

While prices are currently trying to inch above the downtrend line, I think a solid break above 32.25 will likely propel CL up towards any of all of the price targets listed on this chart. Note: those are the actual resistance levels, un-adjusted for an optimal fill as most of my price targets are. Best to set your sell limit orders slightly below if trading CL. Should crude rally from here, I could see a run to as high as the 10.50 level on USO, which would correlate to a gain of about 13% from where USO closed yesterday.

Jan 12, 2016 9:37am|Categories: Gold & Commodities|Comments Off on Crude Oil (CL – USO) Bullish Setup