{"id":51567,"date":"2020-02-10T10:25:31","date_gmt":"2020-02-10T15:25:31","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=51567"},"modified":"2020-02-10T11:03:56","modified_gmt":"2020-02-10T16:03:56","slug":"crude-oil-buy-setup-with-16-risk-reward-ratio","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2020\/02\/crude-oil-buy-setup-with-16-risk-reward-ratio\/","title":{"rendered":"Crude Oil: Buy Setup With 1:6 Risk\/Reward Ratio"},"content":{"rendered":"

Last time I updated on the crude oil futures in May 2019, I asked if \u201cYou Were Waiting for Crude Oil at $20\u201d<\/a>. Both the weekly chart<\/a> and the monthly chart<\/a> had a bearish outlook as the price of crude topped at $66.60 and then it plummeted below $60. The targets were set between $32 and $22. Check out the poll results below. <\/p>\n

\"Crude<\/p>\n

Most of you voted that the price would tag the former bottom of $26. As we know now, the price indeed dropped heavily, but it couldn\u2019t break below $50 and bounced back up from there. So the majority result was the closest call, although with a considerable difference.<\/p>\n

The chart structure had changed since then and I am happy to share with you the emerging buy setup for crude oil futures with a considerable reward opportunity. Let\u2019s start with an updated weekly chart below to see the idea. <\/p>\n

\"Crude<\/a>
\nChart courtesy of tradingview.com<\/em><\/small><\/p>\n

We can see in the weekly chart above that the crude oil futures spent almost one year within a $50-67 range. The whole zigzag fitted nicely within an almost flat orange channel. It consists of two drops highlighted with two red down arrows. The second drop recently tagged earlier lows at the $50 level and reached the same distance as the first move to the downside. This created an almost perfectly flat range.<\/p>\n

This corrective structure retraced more than 61.8% of the preceding move up marked as blue AB segment. All minimum targets were reached within the flat orange correction and I think the new valley at $49.31 could be considered as a bottom. <\/p>\n

The AB segment distance is equal to $24.24 and 17 weekly bars. Then the target for the second move up within a blue CD segment equal to the AB segment could be set at $73.55 at the start of June 2020. The bullish move could extend itself and tag the former top of $76.90 (October 2018).<\/p>\n

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Do you think crude oil has bottomed already?<\/strong><\/p>