Big Gains on Both Sides of Oil Trade
by Mike Paulenoff
February 6, 2015 • 6:31 PM EST
We played both sides of the oil trade this week with succesful results.
On Feb 3, ahead of the next day’s crude oil inventory data, we added USO puts in anticipation of bearish inventory news and a correction of its Jan 29-Feb 3 up-leg. We exited on Feb 4 for a 63% trade, and then added USO calls to capitalize on an expected recovery up-leg to retest the Feb 3 high. That 24-hour trade returned 72%.
It was a great week in general, in which all our exited trades -- including MOS (+3.1%), HAL (+3.7%) and XLE (+7.5%) -- were winners.
See crude oil chart below.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
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More Top Calls From Mike
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With the stock trading at 67.16, Mike noted:
"My pattern work suggests strongly that PENN ended its most recent bout of weakness off the 75.24 high into today's low of 63.58, which is part of a larger-developing high-level bullish digestion period. As long as this AM's low at 63.58 remains intact, PENN's set-up points higher ... towards the 73.
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"BYND is pushing up towards a test of its year-long resistance plateau that spans from 160 to 168, which if hurdled and sustained will trigger significant upside potential that projects to 235-250, and thereafter, possibly to 280-300. If BYND does take out 165 on a close, then my sense is that Q4, 2020 will be a very powerful period of higher prices.
Back on Sep 16, Mike Paulenoff told MPTrader members that Sonos (SONO), the under-the-radar, work-at-home speaker company, had triggered initial buy signals.
Mike explained that the stock, which was trading at 14.35/36 at the time, had climbed above its up-turning 10 and 17 DMAs, in route to a challenge of the "flattish" 50 DMA, now at 14.75.
He wrote: "The recent low at 12.40 on 9/04 represents an exact 50% retracement of the major upleg from the March low at 6.58 to the July high at 17.
In his Trading Room on Friday, Mike Paulenoff highlighted a trading opportunity in Penn National Gaming (PENN):
Mike wrote: "During the past week, PENN has been in the grasp of a corrective process (no doubt exacerbated by the announcement of a secondary offering on Thursday morning). The correction has pressed PENN into important support at 62.00 that extends down to 57.60, and includes the up-sloping 20 DMA, now at 62.06. As long as any selling pressure is contained above 57.
On Sep 2, with QQQ trading at 300.01, down nearly 4 points from its pre-market thrust to a new all time high at 304.02, Mike Paulenoff alerted MPTrader members to the potential danger signals lurking within his chart work. He wrote:
"Just in case TSLA and AAPL weakness represent the first shot over the bow ahead of a significant correction in the NDX, my work on QQQ indicates that a break and close under 298.00 will trigger sell signals that project to 280.
