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Don’t Miss This Breakout In Crude Oil ETF

ByDeron Wagner
Published 08/28/2013, 03:16 AM
Updated 07/09/2023, 06:31 AM

As you may recall from my August 18 post, I have been bullish on both Oil and Silver ETFs (and, to a lesser degree, Gold) for the past week.

Now, my patience is paying off because crude oil (USO) has convincingly broken out above key resistance of an 8-week base of consolidation. Take a look:
USO

Our current position in $USO is now showing an unrealized price gain of 7.7% since our swing trade buy entry. Also, the position in our leveraged Silver ETF (AGQ) is now up more 10% since our August 21 buy entry.

When the main stock market indexes are down sharply (as they were yesterday), the benefits of ETF trading really become clear.

Unlike stocks, most of which are correlated to the direction of the broad market, ETFs enables traders and investors to still profit in a down market because many types of ETFs have low to zero correlation to the overall stock market direction.

Commodity ETFs such as USO and AGQ are two great examples of the above.

A secondary buy entry point into USO would be a slight pullback to new support of the breakout level (consider a buy limit order around the $38.50 to $38.75 area).

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