USO might be forming a top here. Look at the chart. A divergence in RSI and price action shows that USO's uptrend is weakening and could be falling apart. A higher high in price, a lower high in RSI. Support holds, but RSI shows a lower low.
In addition to this pattern, USO's price action hints that this may be a top. Currently, the etf looks to be heading back up to 77ish (resistance). If that rally fails at that level or before, you'll have a nice topping pattern. Price will then likely fall back down to support at 68.25ish. At that point, look for a break in that level for confirmation of a top.
An alternate scenario is that USO could simply be in a range and will continue trading back and forth from support to resistance. If this is the case, then go long at support and short at resistance with stops placed conservatively.
I'll keep watching this patterns and will update in the days/weeks ahead.
2 comments:
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