USO bull signal

The exchange-traded fund that tracks crude oil, USO, gapped higher at the open and is showing a psar bull signal. The pps went into bull mode two days earlier.

The 1.1% gap puts USO at a reversal point that has been touched six times previously in the past three months.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
USO $40.41

With an adx of 14, USO must count as a weakly trending stock prone to whipsaws, and the three-month chart shows two psar signals lasting only three days each, and one lasting two days.

So trader beware!

The macd moved above the zero-line today, and the sto entered overbought territory. Both are bullish signs.

You are here:

• Reversal
• $44.68, +10.4%
• $41.58, +2.9%
• $41.19, +1.9%
• Now  $40.41
• Reversal
• $38.55, -4.6%
• $38.30, -5.2%

A move above $41.58 puts the price in the long slide from $119.17 that began in 2008. There are many reversal points along the way, but they are space further apart than in the present area of sideways congestion.

So I would find a $41.58 breakout to be convincing for a directional bull play. Otherwise, I would tend more toward a sideways play, such as an iron condor with maximum profit at expiration running from $40 to $35. The April premium is a credit of 44¢ for such a position, so it's not real attractive.

This signal will be followed in the daily Watchlist, which is posted beginning around 2:45 p.m. Eastern. Look for it at www.timbovee.com.

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic   

About the glance:  The colors indicate the state of each signal.

• trend: green for up, red for down, yellow for sideways
• adx: green for above 30-up, red for 20-down, yellow for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.