United States Oil (USO) prices lose 5%, drop back toward $70 a barrel

United States Oil (USO) prices lose 5%, drop back toward $70 a barrel

United States Oil (USO) prices lose 5%, drop back toward $70 a barrel

U.S. oil prices dropped back toward $70 a barrel on Wednesday, losing 5% to finish at their lowest in over two weeks. The Energy Information Administration reported that U.S. crude supplies sank 12.6 million barrels last week.

The news, however, failed to offset pressure from expectations that Libya will soon resume oil exports and concerns surrounding the economic impact of worsening U.S.-China trade tensions and a stronger dollar. August West Texas Intermediate crude CLQ8, +0.75% dropped $3.73, or 5%, to settle at $70.38 a barrel on the New York Mercantile Exchange, the lowest finish since June 25, according to FactSet data.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 14.01.

The projected upper bound is: 15.08.

The projected lower bound is: 13.56.

The projected closing price is: 14.32.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white 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 40.9338. This is not an overbought or oversold reading. The last signal was a sell 4 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 50.87. 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 6 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 -6. This is not a topping or bottoming area. 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 13 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.760 at 14.310. Volume was 100% below average (consolidating) and Bollinger Bands were 98% wider than normal.

Open High Low Close Volume___
14.880 15.030 14.217 14.310 3,320

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

Moving Averages: 10-period 50-period 200-period
Close: 14.86 14.02 12.52
Volatility: 39 34 29
Volume: 19,889,848 20,317,104 18,429,282

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 14.3% above its 200-period moving average and is in an upward 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 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 9 periods.

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