United States Oil (USO) Rebounds Following U.S. Sanctions Against Venezuela

United States Oil (USO) Rebounds Following U.S. Sanctions Against Venezuela

United States Oil (USO) Rebounds Following U.S. Sanctions Against Venezuela

Energy stocks are higher in the pre-market along with stronger oil prices and higher equities futures following strong earnings reports from several bellwether companies.

Both WTI and Brent oil prices are up 1% rebounding slightly from yesterday’s losses supported by announcement of US sanctions against Venezuela’s oil industry which will include a three-month wind down period for US buyers.  Speculation that the US will release oil barrels from the SPR and that Venezuelan barrels could be diverted to other geographical regions limited the overall upside to oil prices today.

Natural gas futures are up just moderately ahead of contract expiration later today.  Very cold air in the Midwest and Northeast is expected in the coming three days but a warming trend into next week pressured prices yesterday.

MARKET COMMENTARY

Major U.S. stock index futures were slightly lower as investors focused on a raft of major companies’ results and ahead of Fed policy meeting. Apple, eBay and Advanced Micro Devices are expected to report their results after the closing bell. European equities inched higher, buoyed by utilities and consumer goods stocks. Most Asian shares slipped after the U.S. levelled sweeping criminal charges against China’s telecom giant Huawei, days before the next round of U.S.-China trade talks. Gold climbed to a more than eight-month high as the dollar eased. Oil prices rose after U.S. applied sanctions on Venezuela’s state oil firm PDVSA.

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 12.06.

The projected lower bound is: 10.24.

The projected closing price is: 11.15.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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 5 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 58.8997. This is not an overbought or oversold reading. 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 55.47. 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 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 106.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 1 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 19 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.210 at 11.160. Volume was 27% below average (neutral) and Bollinger Bands were 16% narrower than normal.

Open High Low Close Volume___
11.120 11.325 11.120 11.160 22,782,632

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

Moving Averages: 10-period 50-period 200-period
Close: 11.11 10.76 13.35
Volatility: 32 54 39
Volume: 29,063,294 36,007,476 24,942,840

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 16.4% below its 200-period moving average and is in an upward 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 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 14 periods.

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