Powerful Upmove in Oil - Mid-Day Minute for Wed June 27th 2007

Jun 27

Powerful Upmove in Oil

by Mike Paulenoff, Wed June 27th, 2007

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Today's bigger than expected drawdown in gasoline inventories despite the build in crude has sparked a powerful upmove in the US Oil Trust (AMEX: USO) in the aftermath of yesterday's weakness and today's lower open. Let's notice that today's action represents a potentially significant key upside reversal session, which would argue that the near-term direction has reversed to the upside (again). Let's also notice that a few times in the past seven sessions the USO has attempted, but failed to hurdle key resistance between 52.25 and 52.60. A confirmed key upside reversal today will argue strongly that the USO will claw its way above 52.25/60 on the way to confronting its 9-month resistance line at 53.55. Yes, I bailed out of my long position yesterday, but I am not yet ready to chase today's upside reversal ... at least until I get some confirmation that a new upleg is in progress.

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!

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