Leading Off…How to Handle USO

Tim Reazor
Chief Investment Strategist
NorAm Asset Management

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.

Best Regards,

Tim

 

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