Dec 14

Oil Prices Holding Up Well

by Mike Paulenoff, Thu December 14th, 2006

Oil prices are holding up well in the aftermath of OPEC's "threat" to reduce production again in February... unless there is another reason for today's strength that we don't know about yet.

If we did not know better -- i.e., the fact that the temperature in NY is 67 degrees right now -- we would think by looking at the enclosed 4-hour chart that the US Oil Trust (USO) has been carving out an impressive bottom formation since early October. To "activate" the bottom pattern, however, the USO must hurdle the Oct-Dec highs at 54.60-55.21, which should trigger upside acceleration towards a target zone of 57.50-58. At this juncture I am staying long the USO for such an eventuality.

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!