Monday, January 3, 2011

USO, Another False Breakout?

There's plenty of charts today that are showing breakouts above resistance that do not hae the volume to back up the move, they also don't have positive 3C profiles and are falling in afternoon trade. This is a questionable day right now in my opinion. USO is just the next I've stumbled across.


Here' USO breaking out above recent resistance from December. Note the volume should be much higher at this point in the day for a solid technical breakout, it should be at least double or triple what we are seeing.

Furthermore, the 5 min 3C was negative right off the open and we saw the price decline from there, it continues to look negative and USO has filed the gap, so the chances of the breakout occurring on a strong breakaway gap have already been erased. The question now is will support hold or do we see another false breakout. If it's the latter, then USO could tumble pretty hard in a short period of time.

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