USO: Keeping An Eye On Oil

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USO: Keeping An Eye On Oil

By Scott Johnson on February 9, 2009 | More Posts By Scott Johnson | Author's Website

USO (USO), the oil ETF, displayed some interesting action on Friday, gapping down at the open, then building a base before spiking higher on heavy volume, followed by a sharp decline to end the day down just over 2%. Volume was perhaps the highest in the history of the ETF. Below are 6 month and 5 day charts:

Considering that volume has been building during the past month as USO has consolidated near the lows, and also considering recent action in oil services and other commodity-related stocks, there is a good chance for an intermediate-term bottom in oil. In any case, USO is providing a low-risk long entry, with a stop below the 52 week low.

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