USO closes within previous day's range after lackluster session
United States Oil Fund (USO) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
USO ended the month 8.5% higher at 28.08 after losing $0.19 (-0.67%) today on low volume. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (USO as at Jun 30, 2020):
Tuesday's trading range has been $0.74 (2.65%), that's below the last trading month's daily average range of $1.00. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USO.
Prices are trading close to the key technical support level at 27.49 (S1). After having been unable to move above 28.47 in the prior session, the ETF ran into sellers again around the same price level today, missing to move higher than 28.54. The last time this happened on June 4th, USO actually gained 4.98% on the following trading day.
Although the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the nearby swing high at 29.42 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 26.82 where further sell stops could get triggered.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for USO. Out of 449 times, USO closed higher 51.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 55.90% with an average market move of 0.28%.