[ Jump to the 2024-01-28 update ]
[ Jump to the 2024-01-15 update ]
[ Jump to the 2023-12-03 update ]
USO has been respecting its 130-week SMA (body) support line since January 2022.
In March, May, and June of this year the ETF traded just above that support line, before it took off in July.
Last week, USO’s price retreated to trade in close proximity to that same ol’ 130-week SMA line, before it bounced right up:
It will be interesting to see whether the ETF continues trading between the converging support and resistance lines for a few additional weeks before a big breakout takes place.
We’ll be watching.
2023-12-03 Update
In the last 2 weeks since we published this post, USO traded above but close to its 130-week SMA (body) support line, staying within the converging lane of the best respected support and resistance MA lines:
The hatch is getting narrower and now stands between $82.61 and $66.90.
Will the price of the United States Oil ETF continue to oscillate in the narrowing tunnel? Or will it break to the down side? Perhaps to the up side?
We’ll keep you updated.
2024-01-15 Update
The United States Oil ETF has been floating around support area for the last six weeks. Still, it is trading within the narrowing tunnel, formed by USO’s weekly moving average support and resistance lines:
Note USO’s price broke both the body and the wick support lines. However, the above chart still includes the ‘original’ 130-week SMA and 139-week SMA lines. Some market participants use MA support and resistance lines as area / level markers rather than watch for the exact price (refer to: How accurate are the moving averages when acting as support and resistance lines?).
Take these line breaks into account and you’d see these support lines:
We’d keep watching USO with its ‘original’ support lines. The tunnel keeps narrowing and so is the ETF’s price. However, this won’t last forever.
2024-01-28 Update
After seven straight weeks that USO traded at its ascending support area without breaking it, last week the ETF made its power move up – and into the narrowing tunnel:
The support area is held by USO’s 130-week SMA and 139-week SMA lines that registered two years ago.
We first detected this support area in June 2023 (131 and 139 periods were originally detected):
From here – can we see USO back up to the $80-83 area?
We cannot predict prices, however, if price does increase to these levels, it would have to face the good ol’ 309-week EMA and 318-week EMA resistance lines, which acted as strong resistance in the two previous encounters with the ETF’s price.