Hello traders! On November 11, USOIL has rejected the 261.8% Fibonacci retracement level at $42.58, after which the price went down sharply. This downside move resulting in the break below the uptrend trendline, although pullback up followed. On the pullback, USOIL rejected the 88.6% Fibs at the $42.37 level, forming a resistance area between $42.40 – 42.60.4
It seems like there is a minor resistance at $42.10, which was formed on a pullback after breaking below the trendline. Clearly, this resistance continues to be respected as on one attempt to break above, USOIL failed to close higher.
As long as the price remains below the above-mentioned resistance area, it is likely that a strong downside correction is about to begin. It might take the price down to the $35.90 support area, which is confirmed by two Fibonacci as can be seen on the chart. Besides, right now, we could be witnessing the very beginning of a long-term downtrend, but this can only be confirmed if USOIL will break below the $35.90 support area if/when reached.
But as always, the probability of an uptrend continuation can not be ignored. And USOIL will manage to produce a new higher high while breaking above the key psychological resistance at $43.00, the uptrend should be expected to continue.
Bias: Strongly bearish while below $43.00
Potential Resistance Zone: $42.37 – 42.58
Potential Targets: $35.88
Have a profitable trading!