United States Oil (USO) reinstated US sanctions on Iran coming into force
Oil prices dropped on Monday despite the reinstated US sanctions on Iran coming into force.
Donald Trump pulled the US out of the Iran nuclear deal earlier this year, and market experts had predicted that the renewed sanctions would drive oil prices up due to concerns over lack of supply.
However, global benchmark Brent crude was down 0.25 per cent at $72.65 (£55.93) per barrel in early trading, while US benchmark WTI dropped 0.43 per cent to $62.87 (£48.39).
Experts noted that the price of Brent crude has fallen by 16 per cent since reaching a high of more than $86 in October, and said this was mainly driven by a drop in demand due to slowdown in the global economy.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 14.45.
The projected upper bound is: 13.95.
The projected lower bound is: 12.60.
The projected closing price is: 13.28.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 21 white candles and 26 black candles for a net of 5 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 5.1814. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 6 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 27.12. This is where it usually bottoms. 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 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 -140.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 6 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 18 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.010 at 13.300. Volume was 5% below average (neutral) and Bollinger Bands were 62% wider than normal.
Open High Low Close Volume___
13.490 13.590 13.290 13.300 19,649,376
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 13.86 14.75 13.83
Volatility: 32 29 31
Volume: 26,823,300 20,258,364 20,804,864
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.
UNTD ST OIL FUND is currently 3.8% below its 200-period moving average and is in an downward 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 bearish on USO and have had this outlook for the last 14 periods. Our momentum oscillator is currently indicating that USO is currently in an oversold condition.