Oil finally started making up for lost time. Despite strength in stocks and weakness in the Dollar throughout September, oil remained below its mid September high the latter part of the month. Broken support around 34 turned into resistance and was holding. Things suddenly changed as the USO Oil Fund (USO) broke out with the biggest weekly gain since March. USO also broke above the May trendline. Broken support and the August high combine to mark the next resistance zone around 37-38. The second chart shows the US Gasoline Fund (UGA) following oil higher with a breakout as well. Broken support turns into the first resistance zone around 36-37.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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