Oil (USO) Headed Lower on Technicals – Bearish Engulfing

We have been watching oil closely over the past few weeks as the breakout and breakdown pattern has been providing for a good deal of profit opportunities. Now it appears that it is close to a topping point and the bearish engulfing pattern has been a good predictor over the last several cycles.

From Briefing Trader:

United States Oil (USO) shares are now posting a ‘bearish engulfing’ candlestick pattern on the daily as price slides to fresh lows @ midday, with a short-term play to possible close the Mar. 5 gap @ 39.29.

Even as shares bounced a bit toward the close trading in the commodity pits, the pattern stands.

(Clients of Horowitz & Company are Short oil through 2X Inverse ETF – SCO)

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Investopedia explains Bearish Engulfing Pattern
As implied by its name, a bearish engulfing pattern may provide an indication of a future bearish trend. This type of pattern usually accompanies an uptrend in a security, possibly signaling a peak or slowdown in its advancement. However, whenever a trader analyzes any ┬ácandlestick pattern, it’s important for him or her, before making any decisions, ┬áto consider the prices of the days that ┬áprecede and follow the formation of the pattern.

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