With the falling price of oil rattling the global stock markets everyone is trying to figure out just when oil will hit a bottom. Friday morning oil found support at the lower lines of two primary channels.
Taking a look at oil viewing it through the weekly chart of the USO (shown on the left side below), we can see that this is the first support of any kind for oil for some time as it now has support from both its long term blue line channel and its midterm red line channel. We touched down to both Friday morning.
Taking a look also, at the daily chart of the USO (shown on the right below), we can see that oil has developed bullish divergences in the CCI, RSI, and MACD oscillators plus printed a hammer reversal candle on Friday. Traders will be watching for the possibility of either a pin bounce or a consolidation at these lines which would boost optimism that oil may have found at least a bottom if not the bottom.
