USO (United States Oil Fund) at 31.30 Rising Wedge Breakdown Underpins Further Decline towards 25.50 (SELL)

USO completed a multi-month head-and-shoulder top after breaking below the 35.14 neckline support to reach 30.31 (09 Aug). The current 6-week consolidation formed a bearish rising wedge pattern ahead of the breakdown towards 30.31 (Support 1) for a potential retest. Clearance below would open 28.23 (Support 2). (30 Apr 2009 low) which guards 25.50 (head-and-shoulder top target measured from 35.14) (Support 3).

It would take a return above 34.06 (Resistance 1) to neutralize the near-term selling pressure and re-open 35.08 (Resistance 2) near the wedge resistance and the neckline as well. Only a decisive breach of the strong resistance zone would negate the wedge pattern and allow bulls to seek 39.25 (Resistance 3).

Trading Indication:
Short-term (Intraday): Sell at 32.30 or higher
Target at 28.23 and lower; Stop Loss at 33.00 (2%)
Long-term: Possibly buy lower