DB Energy ETF Advances as Anticipated
by Mike Paulenoff
June 13, 2014 • 12:00 AM EDT
On Wed Jun 11, Mike added the PowerShares DB Energy Fund ETF (DBE) as a short-term trade alert. He noted that the ETF holds futures contracts in Brent, WTI, Heating Oil, Gasoline and Nat Gas, and provides a vehicle for participation in an explosive advance in energy in the event of a supply disruption abroad and at home.
In other words, the trade combined Mike's macro analysis of oil prices and geopolitical event risk with his strategic technical work.
The DBE was trading at 29.94 at the time, and on Thursday closed at 30.76, with Mike's target range at 33-36.
Traders should be aware that the DBE trades an average of 78,000 shares on a three month basis, but lately its volume has declined considerably, some days below 7,000 shares.
If oil prices emerge from their longer- term coil patterns, the volume on vehicles like DBE should increase dramatically, but for now, be aware that trading is very thin.
See chart from Wednesday below.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts
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