Time to Sell Oil? You Tell Me...

in #leofinance6 months ago (edited)

Frankly I've been making stupid amounts of money trading the long side of Oil since 40 a barrel WTI after the covid crash. Everything from long holds, to swing trades, and of course my personal favorite conservatively selling put and call options onto the market, about as easy as making money gets in this day in age.

My favorite vehicles have been the double leverage oil exchange traded fund UCO, as well as companies like Exon Mobile (XOM), Conoco Philips (COP), and Devon Energy (DVN). However I'm starting to feel the trade is starting to get a bit long in the tooth. I'm certainly not calling a top in the market right here, today, and now....But it may be a nice time to pull profits, exit, and say thank you and put my money to work elsewhere.

Actually I already have lightened up on some of these positions. On recent trades (several month holds) I'm up about 40% on DVN and about the same on UCO. Now keep in mind just the other day Goldman Sachs just called for 140 a barrel oil. The geopolitical tensions, war and sanction stuff is ripe for higher prices. The attacks on the middle class seems to be a never ending globalist agenda. So part of me says just let it ride, or maybe take some more off the table, but not all.

Here is a long term weekly chart of Brent Crude Oil, trading at over 121 a barrel today. Chart compliments of Yahoo Finance.....since Trading View out of the blue wants to start charging to use their service. I got so used to it being free, it feels weird to pay for it all of a sudden. Anyone else having that same issue? Any suggestions for a good free alternative?

Anyway from a technical perspective one could say we are stretched too far above the 200 week moving average and we are ripe for an extended pullback. Others may say we are due for a lengthy consolidation at these prices as the 200 week moving average moves up towards these price levels. After all, Oil already did trade in this price range from 2011 to mid 2014, and now there is like a bazillion more dollars printed and digitally created out of thin air looking for somewhere to go.

Also you have the stochastic indicator on the bottom turning higher and often that does not give false signals on the weekly chart; a main reason I prefer weekly charts over daily charts. The weekly chart you get far less false signals along with a big picture view.

So, exiting stage left from the oil trade has been on my mind quite a bit lately, and now after spending several months on Blurt it's clear that we have some very intelligent and sophisticated people here; so I figure why not put the question out there and see what kind of response I get.

Is it time to exit the oil trade or let it ride longer? What do you think? I'd really like to know. Hope everyone is doing well and as always I wish you all the very best from beautiful Thailand!

Photo Credit: unsplash.com and Yahoo Finance

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