Is Oil Gearing Up For A Big Move?
Michele Schneider | May 24, 2022 12:19AM ET
The country has been under pressure from rising gas prices for months. Even before the Ukraine war, gas was steadily increasing.
While the U.S continues to look for solutions to manage prices from releasing oil reserves to increasing imports, the oil sector could be looking for another big move from a technical perspective.
The above chart shows the United States Oil ETF (NYSE:USO). Though it has stuck with an upward trend, USO has found clear resistance around 82 to 83.
Currently, USO has made multiple attempts to breakout from this area and has recently consolidated back over its 50-DMA at $77.22. It should also be noted that daily volume has been contracting thus making smaller range days.
Small range days on light volume can be a recipe for a big move as it takes less buying to push the symbol around.
Although the current administration is looking to remedy current high prices, the chart merits attention to the upside if USO can clear last week’s high of $83.63.
From a momentum perspective using our RealMotion (RM) indicator, we can see that on Tuesday, USO will confirm a breakout of the 50-DMA if the price holds this area.
When both price and momentum agree, this helps confirm a buying signal. Paired with USO clearing 83.63, we can watch for a potential trade.
- S&P 500 (SPY) 397 pivotal.
- Russell 2000 (IWM) 168 support.183 resistance.
- Dow (DIA) 327 resistance.
- NASDAQ (QQQ) 285 minor support.
- KRE (Regional Banks) 62.17 to clear.
- SMH (Semiconductors) 215 support. 239 resistance.
- IYT (Transportation) 223 needs to hold.
- IBB (Biotechnology) 116.68 to clear and hold.
- XRT (Retail) Currently the weakest member of the Modern Family.
- GLD (Gold) 171 support area.
- USO (oil) Watch for a breakout over 83.60.
- DBA (Agriculture) Needs to hold the 50-DMA at 22.14.
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