A Bearish Technical Look At The U.S. Oil ETF (USO)
“The price of oil and other petroleum products tends to top out in October and find a bottom during late winter, sometime in February. However, this year’s weak summer travel season and slower than expected consumption of crude may be contracting that cycle,” Ryan Campbell Reports From Forbes.
“During the summer travel months, oil prices climbed as demand for refined oil products such as gasoline increased, but crude has given up those gains. A loss of upward price momentum in the exchange-traded U.S. Oil Fund (USO) paints a bearish picture for the fund, and suggests that we may have already seen the highs in crude oil for 2009,” Campbell Reports.
Campbell continues saying “Using a price channel, we can see the breakdown in action. The chart shows the upward channel in which USO had been moving. When the price bounces off of support, it’s a buy signal. When it is rebuffed at a key level of resistance, it’s an exit signal. Currently the USO is fighting to maintain support at the bottom of the channel, breaking support but striving to retake it presently. The price channel for USO is screaming sell.”
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