USO breaks up from double bottom


First of all, since the beginning of June, USO – the US Oil Fund – has formed a double bottom. As you can see in the blue box, the first bottom is below the lower Bollinger Band, which the second is above it. This formation, according to John Bollinger himself, is a bullish pattern.

In real life now, as we can see in the orange box, following the second bottom, price behavior has been very bullish. In fact, it moved quickly above its 10- and 20-day exponential moving average. Then, it broke above the lower brown resistance line at about 11.5.

Price is currently just on its 50-day exponential moving average and the higher brown resistance line. An eventual break above these two lines will be a further confirmation of the bullish momentum of USO.

By the way, this momentum has already been depicted in MACD, which moved already above its signal line.

In a similar way, USO’s Relative Strength has reversed its trend and is now rising, while it has just crossed above its 20-day exponential moving average.


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