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December 12 Chart of the Day - US Oil Fund

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The United States Oil Fund® LP (USO) is an exchange-traded security whose shares may be purchased and sold on the NYSE Arca. USO’s investment objective is for the daily changes, in percentage terms, of its shares’ net asset value (NAV) to reflect the daily changes, in percentage terms, of the spot price of light sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the Benchmark Oil Futures Contract.

Specifically, USO seeks for the average daily percentage change in USO’s net asset value, for any period of 30 successive valuation days, to be within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.

Now that we've defined what the investment vehicle is let's take a look at its chart.  

You might think that the overall chart could be a mirror image of the Oil Futures chart (/CL).  On the monthly chart from an all time historical perspective we can see that's not the case.  Probably because the fund's data only goes back to the early 2000s.

From a price action technical analysis perspective this chart has its own "personality" so to speak even while tracking along with the oil chart during the last 5-10 years.

Down on the weekly chart is where we can see more of a resemblance to an oil chart.

In fact, we've included two weekly chart views.  One zoomed out and one zoomed in where we've used support/resistance, trend, and Fibonacci to identify potential levels of interest from which investors and traders can develop their plans from.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

We'd like to hear from you in the comments sections.

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