United States Oil (USO) climbs back to a nearly 4-year high

United States Oil (USO) climbs back to a nearly 4-year high

United States Oil (USO) climbs back to a nearly 4-year high

Oil futures rallied on Wednesday as reported declines in Iranian exports due to pending U.S. oil sanctions, and uncertainty surrounding the ability of other major oil producers to make up for the loss, lifted U.S. and global prices back to nearly four-year highs.

The strong gains came despite data from the U.S. government which revealed the largest weekly rise of the year in domestic crude inventories. “The market is having problems reconciling the supply risk from Iran and questions about how much Saudis will pump and a bearish report,” James Williams, energy economist at WTRG Economics, told MarketWatch. November West Texas Intermediate oil CLX8, -0.21% rose $1.18, or 1.6%, to settle at $76.41 a barrel on the New York Mercantile Exchange. That was the highest finish for a front-month contract since November 2014, according to FactSet data.

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 14.69.

The projected upper bound is: 16.71.

The projected lower bound is: 15.52.

The projected closing price is: 16.12.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 20 white candles and 26 black candles for a net of 6 black candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with UNTD ST OIL FUND), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 88.0137. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 5 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 74.05. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 65 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 145.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 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 11 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.210 at 16.080. Volume was 31% above average (neutral) and Bollinger Bands were 38% wider than normal.

Open High Low Close Volume___
15.850 16.240 15.670 16.080 26,224,154

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 15.41 14.52 13.56
Volatility: 23 26 29
Volume: 19,594,486 17,641,200 19,560,930

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 18.6% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect moderate flows of volume into USO (mildly bullish). Our trend forecasting oscillators are currently bullish on USO and have had this outlook for the last 26 periods. Our momentum oscillator is currently indicating that USO is currently in an overbought condition. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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