Crude oil shocks traders as WTI trades negative to -40.32
Stocks tumble after crude oil trades negative for the first time ever. Yahoo Finance's Jared Blikre joins Jen Rogers to break down the day's price action, along with a Yahoo Finance Premium Investment Idea to short Orange S.A. (ORAN) for a potential 5 to 1 reward risk ratio.
Video Transcript
JEN ROGERS: Welcome back to Yahoo Finance. The story of the day has to be what has happened in crude. We have seen a ton of big moves during this crisis, the Dow down 2,000 points or A jobless claims sprint of 6.6. Let's add this one to the list of unprecedented historic moves that we've seen. Jared Blikre, walk us through the day.
JARED BLIKRE: Well, I got to tell you. When crude oil went negative about 2:00 PM, and that was 30 minutes before the pit closes, the official settlement, stocks took another leg down. We can see it's down about 35, 36 points right now. That is below zero-- no, not a temperature, just incredible. But that is a May contract, which is rolling off the board. And tomorrow, June becomes the [INAUDIBLE] month. That is trading up positive 21.45.
So just real quickly, here's what stocks did today. The Dow is off over 500 points, could have been worse. NASDAQ off the least, above -1%. And the S&P 500, off 1.79%.
I just want to pivot here because we have a trading idea, investment idea for Yahoo Finance Premium. And today, it is a short in Orange, which is a French multinational telecom-- or maybe it's pronounced Orange. This is a bearish continuation wedge that we're going to take a look at here. And we'll see it better in the year-to-date chart. So here, we have this big downdraft, and now we have this wedge that's forming right here. And so if you were to go short at the market right now, 12.43, probably want to place a stop above this most recent high that's about $13. And that's going to give you a reward-to-risk ratio of about five because the target is all the way down here by 9.55. That would be an 18-year low.
So maybe you want to get out closer to the lows. But with a five to one reward-to-risk ratio, very decent setup for swing traders. And this is a medium-term trade, for six weeks to nine months. And again, you can get this on Yahoo Finance Premium, 14-day free trial then it's $34.99 monthly or $349.99 annually, Jen.
