USO Chart – Finding Support, Again

I charted the large oil ETF, USO, this afternoon when it was trading at $35.75.  For about a month and a half USO moved along in a nice orderly trading channel with a downward tilt.  Last week it broke through its trend line of lower lows, but quickly recovered.  Just a few days later it broke again and didn’t recover.  At the same time USO fell below its 100 day moving average.  That led to yesterday’s fall and today’s beating. 

The bright spot for bulls is that USO found support at its longer term trend line of higher lows just above $35.50.  That’s very close to USO’s 200 day moving average which should be a strong point of support.  In addition, the past two times Williams %R has hit these extreme levels we’re seeing again now it has turned higher soon after and continued higher for weeks.

Disclosure: I’m short UCO (double oil ETF) December naked puts which are now in the money.