Oil exchange traded funds have been hit by margin hikes and a rally in the dollar, but they’ve encountered buying interest this week at a key technical level.

The $1.7 billion U.S. Oil Fund (NYSEArca: USO) is down nearly 8% over the past month. However, the ETF bounced this week at its 200-day moving average.

Yet “considerable technical weakness remains,” says David Chojnacki, a market technician at Street One Financial, as the oil ETF’s 20-day moving average crosses below the 50-day.

He maps out $42 a share as the area the ETF needs to regain to resume the longer term trend to the upside. “On the positive side, in the last two recent sessions it bounced off its 200-day moving average,” Chojnacki said.

The analyst said with the oil fund holding long term support and experiencing short term headwinds, it may establish a trading range between $37.77 and $42 a share.

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