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USO Challenging Trendline Resistance

USO (crude oil ETP) is currently challenging this downtrend line generated off the early Nov highs. Although crude may need one more thrust back inside the wedge, the positive divergences in place indicate that a break above the trendline is likely to occur in the coming days or weeks.

USO daily Feb 4th

USO daily Feb 4th

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Feb 4, 2016 10:53am|Categories: Gold & Commodities|Tags: , |2 Comments

2 Comments

  1. jegersmart February 4, 2016 12:28 pm at 12:28 pm

    I wonder if this may be a false breakout if we get one…..the fundamentals are very poor for oil in general and the forward curve support storing and selling forward. Every financial institution I have spoken to is short prompt months and long back end – so to me it looks like this will continue and even accelerate. I am looking for late teens on oil unless there is some real demand coming in from somewhere…..

    Just a view from the fundamental side, the technical set up looks objective and valid to me but I would be very careful and of won’t be taking a position currently – either direction….

    Good luck all.

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  2. jegersmart February 4, 2016 12:30 pm at 12:30 pm

    Just by way an additional observation, a lot of producers are selling forward as far as I can see – in January the possible exchange for physical towards month end could have resulted in a rally…potentially……I wonder if this may become a tradeable event in itself over the coming months…..? Just a random thought….

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