United States Oil (USO) Climb on U.S. Reopening Plans

United States Oil (USO) Climb on U.S. Reopening Plans

United States Oil (USO) Climb on U.S. Reopening Plans

Stocks pushed higher with U.S. equity futures on Friday as tentative steps toward restarting the world’s largest economy helped investors look past mixed progress on curbing the coronavirus and dismal data from China. West Texas oil slumped.

Investors in risk assets are ending the week on an optimistic note after the White House set guidelines to reopen the economy, though it has yet to ensure that widespread testing will be available as many business leaders have urged. The president is under pressure, with 22 million Americans applying for jobless benefits in a month, erasing a decade worth of job creation. At the same time, infections have surged in Russia, Germany and Singapore.

Meanwhile, traders largely shrugged off data showing China’s gross domestic product shrank 6.8% in the first quarter from a year ago, the worst performance since at least 1992 and below the consensus forecast of a 6% drop. The yuan edged higher offshore and Chinese shares gained.

Technical Indicators

Overall, the bias in prices is: Downwards

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

The projected upper bound is: 5.70.

The projected lower bound is: 2.78.

The projected closing price is: 4.24.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 6 black candles for a net of 3 black candles. During the past 50 bars, there have been 20 white candles and 29 black candles for a net of 9 black candles.

A hammer occurred (a hammer has a long lower shadow and closes near the high). Hammers must appear after a significant decline or when prices are oversold (which appears to be the case with UNTD ST OIL FUND) to be valid. When this occurs, it usually indicates the formation of a support level and is thus considered a bullish pattern.

A hanging man occurred (a hanging man has a very long lower shadow and a small real body). This pattern can be bullish or bearish, depending on the trend. If it occurs during an uptrend it is called a hanging man line and signifies a reversal top. If it occurs during a downtrend (which appears to be the case with UNTD ST OIL FUND) it is called a bullish hammer.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 10.7798. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 10 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 34.40. 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 buy 9 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 -75. This is not a topping or bottoming area. The last signal was a sell 6 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 buy 12 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.070 at 4.360. Volume was 281% above average (trending) and Bollinger Bands were 38% narrower than normal.

Open High Low Close Volume___
4.400 4.410 4.150 4.360 241,289,872
Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 5.03 7.54 10.75
Volatility: 160 143 80
Volume: 214,864,208 98,486,360 43,432,360

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 59.5% below its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 64 periods.

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