Earlier this month I pointed out how the 50-day moving average had been a pivotal support level and that if it broke that support the USO could head down to as low as $29.
Instead, the 50-day moving average held as support and now the fund is back up at the $37.50 level which has been resistance two previous times in the last seven months.
I have marked the occasions with the three red circles. It is also worth noting that the fund is in overbought territory again, at least on the daily USO chart.
Turning our attention to the weekly USO chart, we see that the fund is right at the trendline connecting the highs from the last three years.
This gives the fund two layers of resistance to get through—the $37.50 level on the daily chart and the downward sloped trendline on the weekly USO chart which is very close to the same level.
The other factor in my somewhat bearish stance in the article from earlier this month was the bullishly skewed sentiment picture.