United States Oil (USO) steady but on track for a fall of up to 5% for the week on growing concern that fuel demand will weaken
Oil prices were steady on Friday, but on track for a fall of up to 5% for the week on growing concern that fuel demand will weaken as the spread of a respiratory virus from China that has killed 25 so far dents travel and darkens the economic outlook.
Brent crude futures LCOc1 were 4 cents lower to $62 a barrel by 0225 GMT, its lowest since Dec. 4, after falling 1.9% the previous session. For the week, Brent is down 4%.
U.S. West Texas Intermediate futures CLc1 were down by 1 cent to $55.58 a barrel, its lowest since Nov. 29. The contract fell 2% on Thursday and is 5% lower for the week.
The new coronavirus has infected more than 800 so far in China, with 25 dead as of Thursday, according to China’s National Health Commission. The World Health Organisation has declared the situation an emergency, but stopped short of declaring the epidemic of international concern.
Most of the cases are in the central Chinese city of Wuhan, where the virus is believed to have originated late last year, though cases have now been found in at least seven other countries.
In a note on a Friday, ANZ Bank warned that further spread could crimp energy demand from the transportation sector.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 12.20.
The projected lower bound is: 11.11.
The projected closing price is: 11.65.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 29 white candles and 20 black candles for a net of 9 white candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 5 falling windows in the last 50 candles–this makes the current falling window even more 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 22.2551. This is not an overbought or oversold reading. The last signal was a buy 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 30.30. 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 11 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 -155.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 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 10 period(s) ago.
Rex Takasugi – TD Profile
UNTD ST OIL FUND closed down -0.240 at 11.660. Volume was 37% above average (neutral) and Bollinger Bands were 34% wider than normal.
Open High Low Close Volume___
11.600 11.710 11.500 11.660 30,868,236
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 12.20 12.34 12.03
Volatility: 22 28 39
Volume: 20,385,426 18,787,328 25,337,564
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 gapped down today (bearish) 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 3.1% below its 200-period moving average and is in an downward trend. Volatility is 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 6 periods.
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