The Moment of Truth for Oil

03/04/2009 10:07 am EST

Focus: ETFS

Michael Paulenoff

Consultant and Publisher, MPTrader.com

The moment of truth for crude oil prices is nearby as they press against the 20-day MA at $39.29, which also represents the mid-point of the Bollinger Bands, and usually supports the price structure on a pullback if the dominant trend direction is up. Right now, the technical work shows a possible upside reversal off of the February 12 low at $33.55, which climbed to $45.30 on February 26 prior to turning lower.

Yesterday's pullback low at $39.44 so far has preserved the 20-day MA, but as of yet, no meaningful upside reversal has occurred.

Keep an eye on USO to see if a long position is warranted based on the behavior of crude oil price action.

This bears watching for ETF traders interested in the US Oil Fund ETF (USO).

By Mike Paulenoff of MPTrader.com

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