Introduction
A few days ago, we looked at CL, which was approaching a significant support zone at $72 per barrel. Price continued to fall and hit the support zone and bounced out with strength as bullish buy pressure surged.
The daily chart now has a double bottom and a bullish candlestick pattern printed on it that we can look at for future positions.
Trade Opportunities
There is the possibility of going long now with a top below the recent low at $71 but for traders looking for a high probability setup that can hold for a longer period of time, that trade is below.
Trade Setup:
- Entry Point: A high-probability entry would be on a break and close above the pivot level. This would confirm the double bottom pattern.
- Stop-Loss: A stop-loss could be just below the most recent low at approximately $71.50. This would provide a reasonable risk-to-reward ratio, as this level is below the support zone and the recent bottom.
- Target Levels:
- First Target: $78.64 (50-day moving average).
- Second Target: $83.42 (R1 level).
- Aggressive Target: If momentum continues, the price could potentially reach the R2 level at $88.94.
