Jan 25

Oil in Recovery Rally Pattern

My near-term work on oil, as represented by the US Oil Fund (AMEX: USO), argues that this morning's high at 46.48 likely ended the upmove off of the 42.56 low from 1/18. My suspicion is that the upmove represents that first part of a larger recovery rally pattern that will resume after the next pullback runs its course, which I think should press prices into the 44.50-44 area in the upcoming hours. If such a scenario unfolds, then from the 44.50-44 support zone the USO will pivot to the upside for a run at 48-49 -- a move in which I would like to participate.
Chart

Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!