What’s Going On With Oil?

As the weekly chart of Light crude shows, the market has recovered from its 80% drop back to the $70s.  Where does it go from here?  Hoping to shed some light, I examined USO via MarketClub’s charts.  The United States Oil Fund, LP (USO) is  ” a domestic exchange traded security designed to track the movements of light, sweet crude oil (West Texas Intermediate). USOF issues units that may be purchased and sold on the New York Stock Exchange under the symbol USO.

What I noticed is that the Monthly TREND turned bullish in May at $32.16. The latest Weekly changed to green at $36.27 on 7/27 and the Daily just changed to green on Friday at $36.06. A Fibonacci retracement of 23.8% would put USO up around $45. It may be a little premature on USO technically because the 200 sma is still moving down, but we’ll soon be kicking out high prices of USO. I am a cautious buy here with stops at $36.25.

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