United States Oil (USO) Stable but Expected to Rise

United States Oil (USO) Stable but Expected to Rise

United States Oil (USO) Stable but Expected to Rise

Gas price declines have begun to slow in the last week with the national average unchanged at $2.85 per gallon today according to GasBuddy data compiled from over 10 million price reports from over 135,000 stations in the last week. While average gas prices remain lower than a month ago, prices are set to begin rising, following the recent surge in oil prices.

“Going into the July 4 holiday, I can’t remember the last time oil markets were so active. Oil has surged over 10% just in time for summer’s busiest travel holiday, costing motorists over $1 billion more than last year,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “All the ingredients exist for the national average to inch closer to $3 per gallon, just in time for the second half of the summer.

Undoubtedly, the second half of the summer will be pricier than the first, thanks to OPEC’s production increase falling short of expectations, sanctions to be placed back on Iran by November and falling U.S. oil inventories. And to rub some salt in the wound, hurricane season is still upon us, adding more guess work to where gas prices might spend the second half of the summer. Make no mistake, it won’t be pretty, not nearly as “pretty” as the first half of the summer. Be ready for volatility and likely higher prices at the pump in July and August.”

Meanwhile, Saudi Arabia signaled it may increase production over the weekend, at the request of President Trump, but markets are skeptical, especially since OPEC had recently agreed to a tamer production rise of 600,000 barrels per day. Watch for any increase- if there is one, it may undermine OPEC and oil prices, but would be a boon for motorists as it would likely mean some relief at the gas pump for the second half of the summer.

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 13.75.

The projected upper bound is: 15.67.

The projected lower bound is: 14.30.

The projected closing price is: 14.98.

Candlesticks

A black body occurred (because prices closed lower 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 27 white candles and 22 black candles for a net of 5 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 93.3152. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 11 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 67.96. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 121.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 8 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 7 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.100 at 14.960. Volume was 7% above average (neutral) and Bollinger Bands were 85% wider than normal.

Open High Low Close Volume___
15.000 15.060 14.872 14.960 21,536,156

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

Moving Averages: 10-period 50-period 200-period
Close: 14.13 13.89 12.38
Volatility: 39 32 28
Volume: 25,437,516 20,697,994 18,467,784

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 20.9% above its 200-period moving average and is in an upward trend. Volatility is high 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 3 periods.

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