The ups and down of the oil market are enough to give one a neck ache.
Last week's drubbing saw an increase in volatility as 3 months of gains were
erased in a couple of days. This week prices are going up and down in 4-5%
increments per day. Yet, after all the gyrations, it appears that support
levels are holding, and within the context of my crude oil model, this represents
a low risk buying opportunity.
Figure 1 is a weekly chart of the US Oil Fund (symbol: USO). The support level
I pointed out last
week at 38.84 remains the "line in the sand". Just below that for a good
measure of support is the rising 40 week moving average at 37.89. It appears
that USO is trading around this support level, and despite all the volatility,
we find USO is right back where it landed after last week's down draft.
Figure 1. USO/ weekly
I suspect this represents a good low risk entry at least from the stand point
that if wrong you will know fairly quickly.
Disclaimer: Guy M. Lerner is the editor and founder
of The Technical Take blog. His commentary on the financial markets
is based upon information thought to be reliable and is not meant as investment
advice. Under no circumstances does the information in his columns represent
a recommendation to buy or sell stocks. Lerner may on occasion hold positions
in the securities mentioned in his columns and on the Web site; in all instances,
all positions are fully disclosed at http://thetechnicaltakedotcom.blogspot.com/.
However, their positions may change at anytime. For more information on any
of the above, please review The Technical Take's full Terms of Use and Privacy
Policy (link below). While Lerner cannot provide investment advice or recommendations,
he invites you to send your comments to: guy@thetechnicaltake.com.
Copyright Notice: Except for making one printed
copy of this newsletter or any other materials, files or documents available
from, accessible through or published by TheTechnicalTake, LLC for your personal
use (or downloading for the same limited purpose), none of these said materials,
files and/or documents may be reproduced, republished, rebroadcast or otherwise
re-distributed without the prior expressed written permission of Guy M. Lerner.
Circle Us