Having rallied 188% to all-time highs since Jan 2007; oil has retraced a third in value within the last month and is currently finding support at the 38.2% Fibonacci retracement level, coinciding with the 200-day moving average. With stochastics and RSI indicating oversold conditions, an entrance into a buy position may serve as a low-risk trade with a stop-loss on close below $110.
The UltraShort Oil & Gas ETF (DUG) is equivalent to twice the inverse performance of the Dow Jones U.S. Oil & Gas Index. An entrance into a short postion with a stop-loss on close above $40 may serve as a low-risk trade on speculation of rising oil prices.
1 comment:
Great content here.
I actually went bearish again on oil yesterday. Now that it's fallen more than $7 from yesterday's high, I feel vindicated.
My full thoughts here:
http://alphaapprentice.blogspot.com/2008/08/crude-oil-finding-bottom.html
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