Chart Analysis » uso

Oil Chart – May 10, 2010 Pre-market

Alex F — Mon, 10 May 2010 13:35:39 +0000

I charted the large, light sweet crude oil ETF, USO, before the markets opened today after it finished last week at $36.31. Since oil has been trading without regard to any real fundamentals for a while I like using the chart to get a better idea of where it could be heading. The chart shows USO is near the bottom of its trading range and should show support soon. The $35 horizontal line has been the rough area of previous support, but it’s been lower. That’s where the trend line of higher lows comes in. That trend line shows potential support coming right about where USO ended on Friday.

I left the moving averages on this chart, but they aren’t playing a roll right now since USO just blew through all of them last week, but on the way back up they could offer short term speed bumps. The Williams %R technical indicator is still in oversold for the 14 and 28 day periods. Once it breaks out of that grey area is when I think we’ll have a better idea this is a buying opportunity. For now, get your trade finger ready. A good entry point could be just days away, if not today.

USO Chart – Finding Support, Again

Alex F — Wed, 09 Dec 2009 20:28:48 +0000

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.

SPY Chart – Hello Resistance

Alex F — Thu, 30 Jul 2009 14:21:55 +0000

I charted SPY at 9:56 am on July 30, 2009 when it was trading at $99.24. I’d love to jump into this rally, but the line of resistance from the trend line of higher highs looks menacing. It looks like the 10 day moving average was close to touching yesterday, but SPY gapped up before it could actually get there today. Now it seems it’s a better idea to sit back and wait for SPY head back to its trend line of higher lows before making the next bullish move.

Just because I don’t want to add SPY to my account right now doesn’t mean it’s coming down right away. I just don’t see big upside potential from here. SPY is still showing strong momentum in the Williams %R indicator, so I’ll just keep watching from the sidelines for now with the belief that a better entry point isn’t too far away.

USO Chart – Support Not Far Away?

Alex F — Wed, 29 Jul 2009 19:29:43 +0000

I charted the large Oil ETF, USO, at 2:48 pm on July 29, 2009 while USO was trading at $33.56. USO gapped down this morning to open just below $35.00 and has drifted down from there throughout the day. Once oil changes directions it typically lasts for more than a few days as the “big boys” unwind or add to their positions. Support might not be too much lower though. The trend line of higher lows that started three months ago is only a little more than a dollar away for USO. Just before that is the 100 day moving average. The 100 day along with the trend line of higher lows worked as support a couple of weeks ago and could do the same again this week. I think the horizontal line I drew is a wishful line and doubt it’ll hold support. It was more of a coincidence for where the current price lined up to in the past.

I sold USO August 33 naked puts at the beginning of last week. I had a limit order in to buy to close if the option premiums dropped quickly enough, but missed the low trade by five cents on Monday. Now I’m sitting on a paper loss. If my chart theory is correct, I’ll be back to a profit fairly soon. That said, upside should be fairly limited so I might add some naked calls to my position too.

USO Chart – Premarket July 20, 2009

Alex F — Mon, 20 Jul 2009 13:39:42 +0000

I charted USO before the markets opened on 7/20/09. On Friday it closed at $34.24 and is up in premarket trading. USO looks to have more upside potential than downside risk from here. It found support on its long trend line of higher lows at the beginning of last week. That line coincided with the 100 day moving average to give stronger support there on a revisit south. USO also just closed above its 10 day moving average on Thursday, stayed above it today and is starting off positive this morning.

The upside could see resistance at the 50 day moving average which is hovering around where USO landed after it gapped down at the beginning of July. After that level, USO might have up until its trend line of lower highs near $37.50 today. Last, but not least, Williams %R broke above oversold a couple of days ago on the 14 and 28 day indicators. That always adds to my bullish sentiment for a stock or ETF.

I’m selling naked puts this morning, out of the money to give me a cushion while it bounces around.

USO Chart – July 7, 2009

Alex F — Tue, 07 Jul 2009 16:43:22 +0000

I charted United States Oil Fund LP (NYSE: USO) at 12:23pm when it last traded at $33.95. While a lot of bearish news has caused a solid pull back in USO, it could be nearing support around this level just below $34.00. The main indicators that bring me to that opinion are trend lines. USO touched its trend line of lower lows this morning after coming very close to it yesterday (which could be my less than precise drawing). In addition, the previous point of resistance and then support from May 2009 comes in around $34.00 too.

I’m long SLB which moves closely with USO and I’m staying in it for now. If these trend lines break, I’ll have to consider jumping ship. The horizontal line could break and the trend line of lower lows could keep going for a while still, so I’m going to keep my eyes on it. If this $34 area breaks, $32.00 looks like the next line of support and then $30.00. If USO gets down to $28.00 I plan to sell new naked puts on it. At that point downside risk should be limited.

USO – 3 OHLC Month Chart

Alex F — Thu, 11 Jun 2009 14:32:52 +0000

I charted United States Oil Fund LP (NYSE Arca:USO) at 9:48 am while USO was trading at $59.48.

USO is at the top end of its trading channel near its trend line of higher highs
The 200 day moving average didn’t make the short duration of this chart, but is looming around $64 give or take
Williams %R is still in overbought, but still showing momentum.

Opinion – The speculative bug has Wall Street running after oil again. This ride can continue for a while still, even from current prices. With steep trend lines USO can continue to hit new highs each day without breaking its trend line. I’m holding off on buying in at this point on USO’s chart, but if it can dip or trade sideways for a few days while the lower side of the trading channel catches up I will consider it. Same thought goes with the 10 day moving average. I’d like to see USO move closer to its 10 day before I buy in again.

USO – 3 Month Chart – April 28, 2009

Alex F — Tue, 28 Apr 2009 17:31:58 +0000

I charted the large Oil ETF, USO, on April 28, 2009 while it was trading at 27.78 a little after 1:00 pm.

USO hit resistance two days at its trend line of lower highs
USO has not traded above its 20 day moving average for more than two weeks
USO briefly made it above its 10 and 50 day moving averages for the past two days intraday, but could not hold support there
USO has used the $27.90 area as resistance or support more than 10 times over the past two months – Today it was resistance again
USO has a short trend line of higher lows offering support

Opinion = The next few days could go in either direction for USO with trend lines supporting both directions. The longer term trade gives limited downside risk and greater upside potential for USO. The next true test of support could come with a retest of April 21st’s intraday low of $26.28. If that line holds I think it would offer a great entry point. (Disclosure: I sold USO naked puts yesterday since I think the direction could even stay relatively flat for a few more weeks.)