Oil prices have been slaughtered but over the last month or two has enjoyed a nice little rally of over 20% from its lows in January. This rally seems to have petered out and over the last few days Oil has been in a decline and moved back below the $50 a barrel level.
The Oil chart is looking bearish unless it can breakout of this short-term downtrend. The chart shows how Oil prices has declined 10% since hitting its high in the middle of February, since then it has trended downwards and is testing support at 48.43. Each time this level has been touched since January it provided a bouncing point. But looking at the last few days, this level has not providing much of a bounce. On Friday Oil prices could barely rally after hitting this level. The short-term moving averages are showing a downward trend as well. If this level breaks oil will easily test its lows below 46 and potentially decline another 10% based on the descending triangle pattern.
USO is a way for the pikers to play this decline is showing the same signs.
