Today’s trade was an Oil Feb. contract with a buy order from a price of 51.42. The price had been moving in an upwards trend with the Moving Average blue line above the Moving Average red line. The price had also tested and broken through the major support/resistance level of the white line at a price of 51.50 right before it came back below to test the Moving Average blue line.
The yellow circled bar that closed at its opening price is our buy opportunity as that bar is reversing the mini-trend of the three previous red bars while still continuing the overall trend upwards. The price also has the additional support of the Parabolic SAR red triangles below the price and since the price has already broken the major support/resistance level of the white line at a price of 51.50 is should break that level again.
Once in the trade, the price also broke the high of the last price move, the price then closed down with the red bar with the little yellow line under it. At that point we could enter a sell limit order up at our obvious price target of the major support/resistance level of the white line at a price of 52.00.
Otherwise, we could exit the trade a little later once the Parabolic SAR red triangles were broken in the large yellow circle but that would only give us half the profit of exiting the trade at the earlier point.
At that higher point it would give us a profit of $580.