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The Oil Trend Is Now Up! - Mike Swanson (10/17/06)

Submitted by Mike Swanson on Tue, 2006-10-17 07:58.


Oil is on the move. As I noted yesterday it had fallen so much over the past two months that it became more technically oversold then it had been at any point in the past six years. This month oil stabilized and went sideways as it put in a bottom and based out. Yesterday it broke out of its two month long downtrend resistance line. The trend for oil is now up.

And it's not just the charts saying this. It's logic too. OPEC is meeting on Thursday to discuss production cuts. And don't forget we are now entering winter heating season, which historically has been a bullish period for energy stocks. Oil should now trend up through the end of the year. This correction has provided an excellent entry point for people wanting to position themselves in energy, just as the recent correction has done the same for gold.

And of course we did just that, buying a position in energy over the past two days. To find out what we buy and when we buy - and sell - you need to take a 30-day risk-free trial to WSW Power Investor. Click here:

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Hello. My name is Mike Swanson. I’m the best-selling author of the book Strategic Stock Trading. In a former life I used to run a hedge fund from 2003 to 2006 that generated a return of over 78% during that time frame. In fact it was ranked in the top 35 out of 5,000 hedge funds in 2005.

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