United States Oil (USO) prices logged the worst weekly performance of the year

United States Oil (USO) prices logged the worst weekly performance of the year

U.S. oil futures ended higher Tuesday, but global crude prices finished flat, after prices for both benchmarks logged their worst weekly performance of the year, as traders continued to weigh risks to supplies, as well as demand.

“Crude oil prices have been quite volatile of late, owing to a simultaneous rise in supply-side risks and investor concerns over demand,” said Fawad Razaqzada, technical analyst at Forex.com.

“Oil exports have fallen in Iran because of the U.S. sanctions while outages in Venezuela, and elsewhere, have further reduced supply. However, oil shipments from Russia are recovering after contamination affected Druzhba pipeline,” he said. “This should ease supply concerns slightly, potentially leading to weakness in prices—everything else being equal.”

For now, West Texas Intermediate crude for July delivery CLN19, -1.03% on the New York Mercantile Exchange climbed 51 cents, or 0.9%, to settle at $59.14 a barrel. Front-month contract prices lost 6.8% last week, driven there especially by Thursday’s finish at $57.91, the lowest level in more than two months.

Front-month WTI was down nearly 8% for May so far. On Monday, regular trading for WTI on Nymex was closed for Memorial Day, though ICE-traded Brent crude had shortened trading hours.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 12.83.

The projected lower bound is: 11.64.

The projected closing price is: 12.23.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 24 white candles and 25 black candles for a net of 1 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 20.3346. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 36.45. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 22 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -133.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 3 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed unchanged at 12.230. Volume was 4% above average (neutral) and Bollinger Bands were 1% wider than normal.

Open High Low Close Volume___
12.370 12.370 12.200 12.230 23,404,234

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 12.76 12.93 12.69
Volatility: 39 29 38
Volume: 23,979,658 22,194,078 25,359,342

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

UNTD ST OIL FUND is currently 3.6% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of USO at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on USO and have had this outlook for the last 16 periods.

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