A reader asked the following question:
"(2) on USO, you issued buy signal. in video you mentioned 'bear trap' and 'be careful' because of 'downtrend but short rally'. then in your 02/07 blog post, you wrote the title 'Oil rebound may take it to around $70 $WTIC'. can i jump in to buy now or wait for your buy signal on uptrend long term? "
Stocks in motion tend to stay in motion. An up-trending security could always get more expensive and a down-ternding one, could always get cheaper.
Right now there is decent support for oil in the $44-46 area, but there is no denying oil is in a downtrend that started in August of 2014.
Longer-term (weeks to month) oil is in a bear market, that means it is *usually* more profitable to short rallies.
So if oil rolls over here, it could retest the $44-46 area and possibly break down below it.
USO is already in an overbought territory. If a sell signal is generated on this chart, it would make more sense for me to short at that point, rather then picking a bottom and hoping for a sizable rally (which could also happen as I mentioned in my blog post about $WTIC. http://www.masterchartstrading.com/blog/oil-rebound-may-take-it-to-around-70-wtic ).
RSS Feed