USO Chart – April 1, 2009

U.S. OIL FUND ETF (USO) attempts to track the spot price of West Texas Intermediate (WTI) light, sweet crude oil, but has been affected lately by contagion. I charted USO pre-market on April 1, 2009. (OIL is another ETF not as affected by contagion, but is not optionable.)

• USO’s short trading channel of higher lows broke to the downside
• USO gapped below it’s 10 day moving average two days ago
• USO closed below its 20 day moving average for two days in a row
• USO has held support on its 50 day moving average – this line is crucial for the short term
• USO started a sharply down trend line four days ago of lower highs, that could be worth watching
• Williams %R on USO broke below overbought three days ago signaling a good time to sell based on its history

Opinion = USO has further to fall before recovering, unless the 50 day moving average holds