USOIL Trading Tip:I took the time to chart the HUGE DROP of the market that was on on April 20,2020 from Covid times. It's to show how price action dropped down to .01 cents per barrel, then went into major recovery. This can serve as a clue of how the market may recover again from the recent historic drop.
Looking at the Daily chart, there's a lot of markings on there, but I'll only highlight the key takeaways:
- Overall, a giant Head-and-Shoulders was forming;
- Two, Double Inside Day patterns completed on March 11 and March 23 that foretold of a BIG move coming;
- Major pullback towards the Bearish Trendline (in red dotted line) as a Dark Cloud Cover pattern, which was a great setup to short from there;
- Popgun pattern revealed See-Saw moves in this sequence: Down-Up-Down. That meant that wide consolidation will show up;
- Huge bearish candle dropped it down to form a Swing Low at .01 cents;
- A giant Triangle formed with the very tall bearish candle and bullish and bearish trendlines (in red and green dotted line);
- Biggest Clue of Recovery: HUGE Gap UP that created an Inside Day for a market pause for candles to go into consolidation and cross the Bearish Trendline (in red dotted line) to flip the market bias from Bearish to Bullish Market Bias. There was also a breakout from the Inside Day pattern's high at $21.34.
- Strong bullish trend formed with stairstep consolidation to form S&R Zones, then rally from them.
*After the BIG drop, it took 19 days for price action to reach the Swing High of 29.11 and going from April 20 at .01 cents to February 2 to reach the Swing High of
54.45 to reach the Swing High of where the Big Drop was initiated.
**So, watch for a potential BIG Gap Up for quicker recovery from the lows of where the market is currently at. History may repeat for how the correction happens.
For an Expanded Chart view, here is the link: tradingview.com/x/gj2BofLk/
