How to Trade Oil Today by tradeCompass

Crude Oil Futures Analysis for February 25, 2025 – tradeCompass

At the time of this analysis, crude oil futures (CL) are trading at $71.05. Today’s TradeCompass strategy remains open to both bullish and bearish scenarios, depending on whether price crosses key thresholds.

🔹 Bullish Outlook

TradeCompass will only turn bullish above $71.63, which would place price:

• Above the Value Area Low (VAL) of February 18
• Above the Value Area High (VAH) of February 14
• Well above yesterday’s VWAP close and today’s current Value Area High (VAH) at $71.25

This threshold is critical because crossing above it would indicate that buyers are in control, increasing the likelihood of further upside.

🎯 Bullish Profit Targets:

1. $71.77 – Below February 18 POC, aligning with the Value Area High of February 6.
2. $71.86 – Just under yesterday’s first upper VWAP deviation.
3. $72.19 – Below Value Area High from two days ago.
4. $72.44 – Just below VWAP of February 5.
5. $72.98 – Below the $73 round number and Value Area High of February 20.
6. $73.28 – Just below the POC of February 11.
7. $73.90 – Just below the Value Area High of February 3.
8. $75.54 – Final swing target, near Value Area High of January 23, an untested historical liquidity level.

💡 Key Insight: The further price moves away from entry, the lower the probability of reaching distant targets. If price does get there, it typically takes longer, requiring patience.

🔻 Bearish Outlook

The bearish case currently appears slightly stronger than the bullish one, given that price has risen from the February 24 low of $69.78 but remains under key resistance. The bearish threshold is set at $71.21, which is:

• Just below the VWAP from two days ago
• In line with key historical levels, including the POC of February 3 and February 6
• Already trading below it, meaning the bearish scenario is active

💡 Stop Placement:

• If shorting, the stop should be above the bullish threshold of $71.63, ensuring that a breakout invalidates the bearish case.
• It should not be lower than $71.56 and certainly not below the semi-round number $71.50.

💡 Short Entry Consideration:

• Some traders may prefer to wait for a retracement up to $71.21 (VWAP from two days ago) or even $71.32 (Value Area Low of February 18) for a better short entry.
• Risk vs. Reward Trade-Off:
  • Waiting for a retracement improves reward-to-risk but lowers the probability of getting filled.
  • Shorting now is higher probability but offers a worse risk-reward ratio.

🎯 Bearish Profit Targets:

1. $70.89 – First key support level after entering bearish territory.
2. $70.54 – Just above yesterday’s VWAP.
3. $70.37 – Just above yesterday’s Value Area Low (VAL).
4. $70.06 – Below an important Value Area High from December 30, a major historical level.
5. $69.52 – Just above the Value Area Low of December 30, an even stronger support zone where shorts will likely cover positions.

🛑 Additional Bearish Swing Targets:

• $67.77 – A key level for patient swing traders.
• $67.50 – Value Area Low of December 23, an important structural support.
• $66.76 – Another potential downside target.
• $66.18 – Value Area Low from December 11, a major long-term support where buyers may step in.

🔎 Summary & tradeCompass Guidance

Today’s tradeCompass provides a structured approach for both bullish and bearish setups:

• Bullish trades are valid only above $71.63, with multiple profit targets up to $75.54.
• Bearish trades are currently active below $71.21, with short-term and long-term profit targets down to $66.18.
• TradeCompass helps traders navigate key liquidity areas where institutions, algos, and professionals are likely to react.
• Use these levels for partial profit-taking, stop-loss placements, and strategic decision-making.

As always, trade at your own risk, and visit ForexLive.com for additional market views. See you in the next tradeCompass update!

This article was written by Itai Levitan at www.forexlive.com.