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Oil Gearing up for a Buy

Posted on May 4, 2009 by Adam

I’m hearing a lot of buzz about oil. China’s numbers today have helped commodities a bit, but I hear traders whispering about a range capped by the level of $55/barrel.

I looked into this a little bit more. If you look at a point and figure chart of crude oil, printing 55 will put it onto a buy signal.

Crude oil will print a buy signal at 55 exactly

If it prints 55, I’m looking for oil to explode higher. It should be able to reach its bearish trendline within a few days at 59, where I will look to take profits.

You could take an anticipatory entry here, but I’m going to wait for a breakout. If we get the breakout, I’ll be buying call options on the USO.

Buy Me!

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