Oil/energy update - Long within the channel, short below it
After I announced that oils and energy were my top sector pick last Thursday, the sector had one really good day on Friday and then went into a major downturn over the weekend on news of a tropical storm, an oil spill in California, and changes to international maritime regulation. This is a good illustration of why I've mostly stopped holding stocks over nights and weekends-- I hate being so exposed to unexpected news. Today there was more bad news, with a slightly lower-than-expected crude inventory draw.
This downturn in oil presents an opportunity. We're getting toward the bottom of our high-volume support area on the volume profile. As we approach the bottom of the channel, there's an opportunity for a long play with a tight stop below the channel to minimize losses. If we get below 56 and also breach the channel bottom, that's the signal for a short play targeting 53.50.
This downturn in oil presents an opportunity. We're getting toward the bottom of our high-volume support area on the volume profile. As we approach the bottom of the channel, there's an opportunity for a long play with a tight stop below the channel to minimize losses. If we get below 56 and also breach the channel bottom, that's the signal for a short play targeting 53.50.
Comment:
Oil broke its channel and looks to be a short play.
