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– Although USO has fallen hard since the start of May, it’s approaching a demand zone (support) around the 36.40-35.60 area. The level also confluences with the 50% Fib Retracement of the AB up move.
– Would look to go long once price has hit or close to that level. Potential trades – long call, short puts, bull put spread (credit spread), bull call spread (debit spread)
– Although IV is higher than HV, both are towards the lower end of the past 12 month range. I might lean towards long calls – a vol increase would help.
– There is another demand zone further south around the 33.35-32.40 area.