United States Oil (USO) recovery in prices could be at a pace slower than expected earlier

United States Oil (USO) recovery in prices could be at a pace slower than expected earlier

United States Oil (USO) recovery in prices could be at a pace slower than expected earlier

The oil sector has witnessed a series of developments in early 2019 that have clouded demand prospects and have sent out a signal to the market that the recovery in prices could be at a pace slower than expected earlier.

Fears are rising over slowing  economic growth in Europe, the United States and China. That may potentially overshadow any potential disruption to supplies because of two key factors — the impact that Washington’s decision to impose sanctions on Venezuelan oil might have on trade flows, and secondly, if the US turns down requests to extend waivers on Iranian oil.

But market participants have been largely unanimous on one theme.

While economic growth concerns may slow the speed of a recovery in oil prices, the fall in the (Organization of Petroleum Exporting Countries’ (OPEC) output to four-year lows — thanks to a late 2018 deal with non-OPEC countries — is likely to prevent a sharp slide in prices.

To sum up, while the rise in prices might be slow in the first quarter, the scope for a slide in prices may be limited.

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 11.44.

The projected upper bound is: 12.48.

The projected lower bound is: 10.96.

The projected closing price is: 11.72.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 30 white candles and 20 black candles for a net of 10 white 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 6 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 93.6275. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 62.39. 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 35 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 158.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 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 0 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed up 0.230 at 11.710. Volume was 40% below average (neutral) and Bollinger Bands were 65% narrower than normal.

Open High Low Close Volume___
11.610 11.730 11.573 11.710 18,769,436

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

Moving Averages: 10-period 50-period 200-period
Close: 11.30 10.77 13.19
Volatility: 27 46 39
Volume: 20,521,880 30,216,432 25,191,628

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 11.2% below its 200-period moving average and is in an upward trend. Volatility is low 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 bullish on USO and have had this outlook for the last 27 periods.

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