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USO Crude Oil Symmetrical Triangle Pattern

USO (crude ETP) is approaching the apex of this symmetrical triangle pattern (60-minute chart) & could break either way. Although USO could reverse off either of the nearby support & resistance levels shown below (10.70 & 9.90), the direction in which this pattern breaks is likely to determine the next near-term trend in crude oil. Also note that the solar stock are likely to follow crude so a downside resolution of this pattern is likely to bring the solar stocks down as well and vice versa.

USO 60-minute Sept 28th

USO 60-minute Sept 28th

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Sep 28, 2016 11:08am|Categories: Gold & Commodities|Tags: , |6 Comments

6 Comments

  1. riverbirch September 28, 2016 12:38 pm at 12:38 pm

    RANDY COULD THE DOLLAR GIVE ANY CLUES ABOUT THE DIRECTION OF OIL?

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    • rsotc September 28, 2016 2:00 pm at 2:00 pm

      riverbirch- Normally, yes but just like crude/USO, the $USD is also coiling within an very similar triangle pattern (can be viewed on the daily chart) and this current triangle formation on the dollar comes after a very large, sideways indeterminable trading range, this current pattern can break either way. So while the outlook for the $USD based soley on the charts of $DXY/$USD is somewhat unclear, it still looks to me that the dollar is set to rally against the Euro & especially the Yen, which make up the bulk of the dollar index. A rising dollar is typically bearish for crude oil prices but with all the pricing distortions caused by the central bank’s intervention in the financial markets, anything can happen.

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  2. rsotc September 28, 2016 1:51 pm at 1:51 pm

    USO reversed the bottom of the triangle (support) & has already made it back to the top of the pattern (offering an objective short entry with a stop on a 60-minute close above):

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  3. murphydoc September 29, 2016 9:09 am at 9:09 am

    With the break upwards of the USO,would you go long now?

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    • rsotc October 3, 2016 3:29 pm at 3:29 pm

      @murphydoc – I’m catching up on notifications to comment replies today & came across this one regarding possibly going long on that breakout above the 60-minute triangle in crude. While it would have been an objective entry for a short-term trade lasting a few days & could certainly morph into a multi-week or even multi-month swing trade, the daily charts of crude just aren’t clear enough for me to want to take any position in crude at this time. A lot like the equity markets, crude has been trading sideways for months now. Such sideways ranges often serve to run stops & even if not, can be quite frustrating to trade.
      Sorry for the late reply but if you took a long in USO following that breakout, it is still trading right around the high-point of that post-breakout rally, gaining over 6% with the first key resistance/target level around 11.15-11.20 (horizontal resistance best viewed on the 60-minute chart) so this is where I would likely be booking profits, had I taken a long on the breakout.

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  4. murphydoc October 3, 2016 3:33 pm at 3:33 pm

    Thanks a lot.

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