Friday, May 21, 2010

Crude Oil - Trying To FInd A Bottom


USO has been selling off sharply since the beginning of this month as can be seen in the above 60 min chart. In the lower panel is the MACD indicator and it is now forming a triple bullish divergence. If we can get two hourly closes above the downtrend line, I think we can see this market rally for a quick move up to the 36.00 area.

Long-term I am still bearish on crude oil and am looking to short the rallies but for now there may be a trade on the long side developing.


4 comments:

Kishore said...

Kevin

Curious to know how did you derive the target of 36!!

Kevin said...

The 36 area was the low from 2 weeks ago.

TraderLars said...

the oscillator can reset in mid-downtrend and invalidate/clear the divergence, this happens in both strong bull and bear markets.

Guava said...

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