United States Oil (USO) prices are delicately balanced between competing forces

United States Oil (USO) prices are delicately balanced between competing forces

United States Oil (USO) prices are delicately balanced between competing forces

Oil prices have generally tracked risk appetite so far this week, dropping sharply on Monday before recovering over the last three days. Wednesday’s rally was supercharged by escalating geopolitical tensions in the Middle East; when asked whether the U.S. would go to war with Iran, the president stated “I hope not.” The latest comments come on the heels of last week’s news that the White House was positioning aircraft carriers in the region and has drawn up plans to deploy more than 100k U.S. troops to the Middle East if necessary.

From a fundamental perspective, oil prices are delicately balanced between competing forces: geopolitical risks in Iran and Venezuela are boosting prices on concerns of a supply shock, while the ongoing U.S.-China trade tensions and potential for OPEC to increase production are keeping bulls on their toes.

Technically speaking, U.S. oil prices peeked out to a two-week high above 63.00 this morning before pulling back as of writing. So far, WTI has only seen a shallow 23.6% Fibonacci retracement of its 2019 rally, suggesting that the medium-term momentum remains with the bulls for now.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 13.68.

The projected lower bound is: 12.66.

The projected closing price is: 13.17.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 3 black candles for a net of 3 white candles. During the past 50 bars, there have been 24 white candles and 24 black candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 9 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 62.2724. This is not an overbought or oversold reading. The last signal was a sell 15 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 54.16. 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 15 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 91. This is not a topping or bottoming area. The last signal was a buy 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 sell 15 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.170 at 13.140. Volume was 14% below average (neutral) and Bollinger Bands were 4% narrower than normal.

Open High Low Close Volume___
13.100 13.240 13.080 13.140 19,642,904

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

Moving Averages: 10-period 50-period 200-period
Close: 12.89 12.83 12.75
Volatility: 25 25 37
Volume: 25,598,384 21,690,924 25,124,738

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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
UNTD ST OIL FUND is currently 3.1% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 9 periods.


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