Would you mind paying more for gas at the pump, if you were able to make massive profits in Oil related trades? If we play this right, not only can we buy all the gas we want, we might just be looking at a brand new car!
In my last update, a few days ago, I said that if Crude Oil futures went up through $37.09 with some good momentum, then that would be a clear signal that the recovery in Oil was underway.
Well, it happened and I stand by my analysis. I think the Oil recovery is a go.
There are several ways to trade the recovery in Oil. Of course, you can just go long on the futures contract, but that takes a pretty large account to hold contracts overnight and beyond. And it carries more risk. I am trading Oil with stocks and ETF’s.
WLL (Whiting Petro) is an Oil related stock that I like a lot. It is low priced but trades with really big volume. I’m looking at an entry of $8.57, with an initial stop of $3.33. If WLL moves with Oil, as it has done so far, we could be looking at a 2X or 3X trade in a relatively short timeframe. Works for me!
If you don’t like low priced stocks, USO (Crude Oil ETF) might another way to play this. I’m looking at an entry of $10.25, with an initial stop of $8.13. USO has huge volume and a very active option market as well. Whatever option strategy you like for a bullish trend play should do really well.
I’ll continue to provide updates a few times a week. I’ll update the price pattern on Oil Futures, the two trades that I called out here, and I’ll add a few more plays as this works its way out.
Stay tuned…
