Crude Oil Heading Into Severe Oversold Territory

Friday, October 9, 2009


Crude Oil Heading Into Severe Oversold Territory By Mike Paulenoff, http://www.mptrader.com/

Yesterday's break in crude oil and downside follow-through from the 7-year trendline at $61.60 to new bear-market lows at $56.35 has accelerated into a new downleg that is pointed right for a test of the Jan 2007 low of $49.90 next. Such a decline represents another 12% on the downside, which should press weekly oil into relatively severe oversold territory for oil and its related US Oil Fund ETF (AMEX:USO). Only a rally that sustains above $62.00 will begin to repair the technical damage inflicted during the past few sessions.

For more of Mike Paulenoff, see his ETF Trading Diary at http://www.mptrader.com/ . To view the chart in today's analysis, visit http://www.mptrader.com/marketshistory.php?id=1190 .

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