Jeff Clark's Market Minute

There’s More Upside Ahead for Oil

Our pre-holiday oil trade is off to a good start. And, there’s more upside ahead.

Two weeks ago, most of the financial television talking heads were bearish on oil. But, we saw things just a little bit differently. We remembered that the cost of filling up a gas tank almost always goes up heading into the 4th of July. So, any post-Memorial Day weakness in the price of oil was probably a good chance to buy the gooey black stuff ahead of the pre-Independence Day rally.

So far so good.

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The price of oil has risen about 9% over the past two weeks. And by the look of the following chart of the United States Oil Fund (USO) – an ETF that tracks the price of oil – the rally still has plenty of room to run.

Take a look…

The momentum indicators at the bottom of the chart – the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) – have turned higher from deeply oversold levels. But, they’re nowhere near overbought. So, there’s plenty of energy left in this chart to fuel a continued move higher.

At a minimum, USO ought to be able to rally up to the first red resistance line on the chart at about $12.25. USO might even have a shot at reaching the next resistance level, just above $13, if oil spikes higher into the 4th of July holiday.

So, if you bought oil in anticipation of this rally, then hang on. There are higher prices ahead.

If you didn’t buy oil yet, then take advantage of any weakness over the next few days as a chance to jump into this trade.

We’ll look to jump out of it as we get closer to the end of the month.

Best regards and good trading,

Jeff Clark

Reader Mailbag

Today, a new Delta Report subscriber shares their results so far…

It was hard to pull the trigger, but I’ve now been reading the Delta Report for about three or four weeks. I have been cautious, but I am back even with my initial investment to buy your service.

I am trying to learn to do this research and make choices on my own. I know that I will have some losers, but that is part of the program. Thanks for allowing me to learn from your experience.

– Larry

And another reader thanks Jeff for his “Happy Father’s Day” essay…

Thank you for your lovely story about your Dad. I’m sure it hit the mark with almost all Dads around today and reassures those subscribers who don’t know you personally that you are a genuine guy who we can trust and follow. Thank you for your regular market insights and suggestions.

– Gordon

How are you trading oil in anticipation for the Fourth of July? What else are you trading?

Let us know, along with any other trading stories, questions, or suggestions at [email protected]. We look forward to reading them every day.

Jeff Clark's Market Minute Archives

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