A couple weeks back I was short USO based on its descending triangle formation. Based on the technical formation of it USO was expected to make a 10 point drop from 28 to 18, since the triangle was from around 38 to 28. I was stopped out of my short and through market ADD, forgot about this lil' fella.
USO looks like to be forming a nice bear flag. This move would actually complete the measured move on the descending triangle, and possibly signaling a bottom for USO. Let's go to the chart.
You can see the descending triangle which has been broken and since then USO has been in a nice decline. The past 4 days the move has consolidated and has began to move up, what looks nice is the volume has been consolidating. I will be watching this very closely, especially since we have Inventories out tomorrow. If the flag is broken to the downside, it should be a 6 point move bringing it to 18ish. Which would complete the measured descending triangle move and maybe a bottom.
