New lows, volatility about to continue, and a potential bounce

In the past few days, USOIL constituted a new low below 73$, marking a 43% decline from its peak a few months earlier. This move came amid our bearish expectations for oil and forecast for lower prices. We continue to stick to this call altogether with our price target at 70$, which was updated recently to a short-term price target (from medium-term). Our views are based on technical and fundamental factors described below and in previous articles.

Illustration 1.01
The daily chart of USOIL shows the price decline between 8th March 2022 and today. The yellow arrow indicates a bearish breakout below the previous low and subsequent bullish retracement. To further support our bearish thesis, we would like to see the price break again below 73.62$ and hold there.

Technical analysis
Daily time frame = Bearish
Weekly time frame = Bearish

Illustration 1.02
Illustration 1.02 displays the daily chart of USOIL and simple support/resistance levels + two simple moving averages. At the moment, the price deviated too far from its 20-day and 50-day SMAs, which is often followed by the price retracement toward a mean; currently, these SMAs act as important resistance levels.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.