USO Opportunity Play?
Check out the latest channel that the United States Oil Fund (USO) has formed. It is pretty steep!! There has been alot of news lately about how Oil is being sold off which is true, just look at OIH, XOM, etc. to get a glimpse. But like anything the news talks up, this typically means the end is near. Look a the extreme volume USO has traded in the last two weeks, big positions are changing hands. As a short term trader, I am going to try and seek opportunity in this fund. Look for signs of this sharp downward channel breaking, and you may have some quick returns under your belt.
More on this topic
(What's this?)
Goldman Recants Its $200 a Barrel, "Super Spike" Call for Oil
(naked capitalism, 11/20/08)
USO
(Random Roger's Big Picture, 1/8/07)
How Oil is Actually Priced: Be Worried
(Jim Kingsdale's Energy Investmen..., 9/29/08)
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Posted by Blain Reinkensmeyer on January 16, 2007 at 11:49 am --
[...] I first posted on the United States Oil Fund (USO) yesterday pointing out possible opportunity if the channel could be broken. Well, after today’s close on heavy volume concluding to the upside after trading down below $43, I am calling USO as a favorable odds buy. What I like about the last 3 days activity are the two heavy volume days that both closed towards the upper ends of their ranges. If you bought at $44.15 (or the closing price), and placed a stop at $43.65, you have a downward range of $.50 or just over 1%. On the upside, the stock may very well gap tomorrow (see my nice blue scribble of a bar) and could move up to $46ish. With a move to $46.15 you are getting 4 to 1 on your money, with only 1% risk. Outlook would be a day or two, and is simply a quick trade catching a rebound. Note also that the 10 day moving average is at about $46. [...]