Exposing Ideas to the Envelope of Serendipity

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Wednesday, December 9, 2009

Crude Awakening?

The recent sell-off in oil has been sharp and steep, sending many stocks in the sector back to test key near-term support levels and breaking the bullish flag-like formation we were monitoring not-so-long ago quite decisively. The wild fluctuations and exaggerated moves that this group seems partial to can impart a lot of noise into a standard bar or candlestick chart, making it tricky to zero in on what's most important. When in doubt, a line chart using closing prices can bring things into focus quite nicely. From this perspective, note that both USO and OIH tested key support lines in Wednesday's trading session.

-- Brinkley
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