Time of Truth for Oil

Time of Truth for Oil
By Mike Paulenoff, www.MPTrader.com

I am not ready to step up to add the U.S. Oil Fund ETF (AMEX: USO) to our model portfolio just yet, but I am getting much friendlier to the idea technically. Looking at the weekly crude oil chart, it's the time of truth for nearby oil prices, as the price structure pressed against its 7-year support line in the $61.60 area, which was violated marginally this morning ($61.30), but NOT by 1-1/2% ($60.60), which would have triggered another bout of weakness to $55.00-50.00 next. However, to get anything going on the upside, nearby oil must hurdle and sustain above key near-term resistance at $65.60-$66.10 to trigger a recovery rally towards $72-$76. Thus far today, the high is $65.77

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