USO is breaking out

28 dic 2012Oil opened higher, swooned with stocks lower on Senator Reid's comments, and finished higher when the day was over. From a technical perspective today's candle is a Dragonfly Doji. The Dragonfly Doji is a bearish reversal candle which is reasonably reliable - if so why is this a breakout. In order for the Dragonfly Doji to be confirmed prices will need to open lower tomorrow and finish lower tomorrow. With the price action above resistance odds are this candlestick pattern will not be confirmed but instead rejected and prices will move higher.

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