I wrote yesterday about my bullish stance on USO. In this newsletter I want to talk about how to handle USO if you’re in it. If crude oil continues on its current trajectory I’d look for USO to retest last September’s $39.54 high. If crude clears that level $42.00 may be in the cards.
The move won’t happen right away. If crude pulls back USO will pull back. The trade is still valid as long as USO holds the 8-day exponential moving average or 21-day EMA. It’s important that you understand the following point. If USO hits $39 before pulling back take profits. Why? Thirty-nine dollars is an area of resistance. USO will most likely pullback at this level. You can reload on the pullback if it holds the 8 or 21 EMAs that I referenced above.
If you want to come into my office and trade with me send me an email. It would be a pleasure to meet, bond and commiserate together – tim.reazor@NorAmAsset.com
I often talk stocks and markets on twitter – you can follow me by searching for my handle – @TJReazor
I hope tonight’s newsletter helped.
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