USO (Crude Oil ETF) will be added as a semi-aggressive Active Long Trade here around the 28.75ish level. The reasoning behind this trade is based on several developments that have been recently discussed here. First of all, I continue to believe that the US Dollar is poised for a major trend reversal and the inverse relationship between the dollar & crude is highly correlated (dollar down, crude up & vice versa). Secondly, crude (as shown in the USO weekly chart below) has fallen to the bottom of a major multi-year support zone while at oversold levels (weekly RSI reading of 21.54) not seen since the plunge in crude prices during the late 2008/early 2009 meltdown in the financial markets. As recently discussed, every oversold reading for at least the last decade has either accompanied or slightly preceded major rallies in crude prices, ranging from 36% to 178%.

Zooming down to the 120-minute period chart, USO is rapidly approaching the apex of a fully mature bullish falling wedge pattern, complete with positive divergences in place. The fact that I have decided to go long crude while prices are still trading within the wedge makes this a somewhat aggressive trade. More conventional traders might opt to wait for a confirmed breakout above the wedge before establishing a long position. The first four price targets are shown on the 120-minute chart with the exact suggested sell limit levels along with the suggested stop(s) to be added soon. Based on the case made for an impending trend reversal in the US Dollar as well as a possible trend reversal in crude prices based on my analysis of the weekly charts, USO has the potential to morph into a Long-Term Trade with additional price targets to be added, depending on how both the dollar and crude trade in the coming weeks & months.