Hey good morning everybody. Happy Wednesday. It’s time for our chart of the week. We’re going to focus on an oil ETF here, USO. It looks like it’s starting to make a little move here with crude oil up strong over these last couple of days.
Let’s take a look at the USO here.
Of course earlier in the year when the Iran War was getting started and moving into different phases, we saw oil really starting to climb and you see the USO really moved up sharply from about the lower $70 level at the beginning of the year up to more than double to $150 or so.
And then when oil started to decline back under $80-90, we saw USO also decline as well.
But take a look at the recent action here. We didn’t quite get down to that 200 day moving average, but we did cross the 50 day moving average to the underside and now have made a series of higher highs and higher lows. On July 13, the ETF made a real strong move closed above $117.
And we think it’s going to make a move up towards the 50 day moving average, which comes in at about $127-120 but still moving down at a rather rapid pace.
Take a look at the relative strength here. It may encounter a little bit of resistance up here coming up soon at the $52-53 level. As long as oil continues to move higher the USO will as well.
We see the MACD as well on a buy signal here crossover just a few days ago.
And money flow is starting to get positive again. It was super positive way back here in the spring and early part of the summer when oil was rallying up above $100 a barrel.
Take a look at USO. Don’t think it’s going to make a huge move. If it does get above that 50 day moving average here though, I think that it has got some room to at least get to the resistance level of about $137, so that would be a really nice move for the USO.
So take a look at USO when you get a chance. Thanks so much for watching everyone, and I’ll see you next time.
