Monday, April 19, 2010

Crude Oil - Bearish Technicals



USO (Crude Oil) has been in a sideways trading range since last summer. Last week the top of this range was tested and it appears that resistance is holding. The MACD indicator in the lower panel has crossed giving a sell signal. The uptrend line has also been broken indicating that the short term uptrend may be over. Given the weight of bearish technicals that are coming into play at this point, further weakness for crude oil might be expected in the days to come.

2 comments:

Don's "Trading-In-Action (TIA)" said...

First of all, i must say USO is a poor indicator of crude oil price movement. USO has some form of time decay effect similar to options but not to the same extent.
To use USO as a gauge of crude oil price action is the biggest mistake if you are trading it on the basis of a point for point advance or decline in crude oil prices.

Look at the futures for crude oil and you can see that they are bullish imo. $82.50 is a pretty good intermediate support for a launch to a new high from here.

Watch the play out over the next few days...

Guava said...

The stand you took here is worth a praise.Oil advanced after an industry-funded report showed a decline in crude and fuel product stockpiles in the U.S, signaling demand may increase.

DISCLAIMER

This site may include market analysis. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Trading and investing involves high levels of risk. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.
 
Google
Technorati Profile Finance Blogs - Blog Top Sites