United States Oil (USO) tumbled more than 35 percent since early October

United States Oil (USO) tumbled more than 35 percent since early October

United States Oil (USO) tumbled more than 35 percent since early October

U.S. oil prices fell 1 percent on Tuesday after slipping below $50 a barrel in the previous session, with reports of a big climb in U.S. inventories and forecasts of record shale output stoking worries about oversupply.

Concerns around future oil demand amid weakening global economic growth and doubts on the impact of planned OPEC-led production cuts were also hurting prices, traders said.

U.S. West Texas Intermediate (WTI) crude futures were at $49.35 per barrel at 0035 GMT, down 1.06 percent, or 53 cents, from their last settlement.

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 12.59.

The projected upper bound is: 11.21.

The projected lower bound is: 9.47.

The projected closing price is: 10.34.

Candlesticks

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 2 white candles and 7 black candles for a net of 5 black candles. During the past 50 bars, there have been 16 white candles and 32 black candles for a net of 16 black candles.

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 30.3772. This is not an overbought or oversold reading. The last signal was a buy 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 34.11. 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 9 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 11 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 9 period(s) ago.

Rex Takasugi – TD Profile

UNTD ST OIL FUND closed down -0.370 at 10.450. Volume was 52% above average (neutral) and Bollinger Bands were 17% narrower than normal.

Open High Low Close Volume___
10.890 10.910 10.410 10.450 40,129,620

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

Moving Averages: 10-period 50-period 200-period
Close: 10.95 12.84 13.67
Volatility: 55 46 36
Volume: 35,627,856 33,315,348 23,126,560

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 23.6% below its 200-period moving average and is in an downward 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 bearish on USO and have had this outlook for the last 42 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

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