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USO UWTI Trade Setup & Entry

USO looks poised for a breakdown below this bearish rising wedge pattern & a move down to the 10.70ish level. This 2nd, consecutive negative divergence will be confirmed via a bearish crossover on the MACD which I expect to happen soon.

USO 60-minute May 26th

USO 60-minute May 26th

As a breakdown below the wedge either today or tomorrow seems highly likely, I am going to add USO or UWTI (3x long crude ETF) as an Active Short Trade here at 12.07 while still inside the wedge. Keep in mind that shorting a security while still inside a pattern & above trendline support is an aggressive entry. More conventional/conservative traders might opt to wait for a confirmed breakdown below the wedge before opening a new position or adding to a starter position taken within the wedge pattern.

The price targets shown on the chart are the actual support levels in which a reaction is likely. The official targets for this trade will be 11.29 (T1) and 10.77 (T2) with a suggested stop above 12.35. T2 is my preferred swing target on this trade.

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May 26, 2016 9:52am|Categories: Completed Trades - Short, Gold & Commodities|Tags: , |3 Comments

3 Comments

  1. rsotc May 26, 2016 10:01 am at 10:01 am

    Of course, assuming my short trade on USO pans out, that would almost certainly drag the energy stocks (XLE, XOP, etc..) down along with it.

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  2. retireat60 May 26, 2016 10:08 am at 10:08 am

    I believe you meant UWTI in the write up above as an active short trade…

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    • rsotc May 26, 2016 10:27 am at 10:27 am

      @retireat60 – Correct, A short trade on UWTI (3x long crude etf) as an alternative to shorting USO. I corrected it above, thx for pointing it out!

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