Short Term Oil - Update
This is an update to the Short Term Oil post that I wrote on Jan 7. For most of the commentary and original thinking on this issue, please read that blog first.
Most of the trends are continuing to develop. As noted when I wrote the post, oil had bounced off $35 and gone to $50. Based on the daily I thought it short term overbought and would go down and retest $35 (which it did). But the weekly trend was still suggesting a longer term rally (on the order of a few weeks at least). The weekly pattern is still setting up and looking better for a rally. This week oil climbed up to $46. There has been a lot of talk in the news about OPEC cuts, Israel and Hamas forming a truce, oversupply, and ultimately contango. Very interesting stuff. Some bullish, some bearish. But the technicals are still indicating a relief rally. How much and how high? Tough to call. But if the S&P does make a breakout to 900 (or even higher) as it can, expect oil to rally with it.
Click on this link to view a larger version of the chart below.
I think this is still a good entry point to be a part of this rally. I personally am long oil in Caps and in real life in preparation for this move higher. I like USO, OIL, COP, STO. And for something a little more risky / speculative I like UCO, DXO (these are different vehicles that trade on futures in different timeframes, so they do not move the same) or ERX.
As always I would love to hear your comments!
The binv standard disclaimer: This in no way constitutes investing advice. All of these opinions are my own and I am simply sharing them. I am not trying to convince anybody to do anything with their money. I am simply offering up ideas for the sake of discussion. As always, everybody is expected to do their own due diligence and to ulimately be comfortable with their own investing decisions.