AMEX:USO United States Oil Fund
After a prolonged slide, crude oil USO seems to be forming a bottom at $2.50 based on pattern on 4 hr chart. However, there may be more room to go down before the bottom is complete. If a break to the upside in the oil prices to occur, it will be driven by positive news of OPEC + production cuts, as well as reopening of the economy. Investors may need to see actual inventories to go down before putting their money into Oil .
Comment: Crude Light June 2020 futures bottomed at $7 and are now trading at $18, while USO keeps sliding. The bottom for USO may be forming at around $2. On the USO chart, we have unfilled gaps between $6.9 and $8.5 price levels, and a smaller one between $6 and $6.5. Since USO is an ETN, those gaps may not get filled due to price decay. Looking back at the Oil prices, a price of $8.5 on USO chart corresponds to $35 on Crude Light futures (/CL) chart. It is possible, that Oil will get to this level over time. The USO will have to break through $6 level first, and then go higher to fill the gap at $8.5. This may be possible only with a sharp break to the upside in Oil prices.