[1] USO has sky dived from $120 (off the chart), on July 2008, to as low as $23 in Feb 2009, signaling a very clear bearish trend.
[2] However from July 2009 until now, price has been consolidating sideways between $42 and $30, from July 2009 to June 2012. Subsequently, the sideways range narrowed to $39.40 and $30, from June 2012 up till now. All in all this sideways consolidation is has been going on for about 63 months now.
This is roughly a sideways Rectangle chart pattern, which is a pause in the bearish trend in [1], with a view to trade at lower prices.
[3] We observed that the latest price action, starting from 2014-06-25, is a developing Elliott 5 Wave pattern, with the price poised to break out on the down side to complete the fifth wave. Therefore we project that a bearish breakout is likely to occur, should price trades below $30.55 over the next few trading days.
Break Out Condition: When price trades below 30.55.
Stop Loss: Above 31.55
Taking Profit: Take Profit Target will be around $27.20, based on the low of 2009-04-20.
Risk: There is always a risk that this a false break out, with possible support buying around $30.00.
Just to let you know, USO price has traded well past the the Target of $27.20.
Might be a good time to book profits and enjoy Black Friday Shopping!