Wednesday, May 21, 2008

DUG Divergence

Take a look at the DUG chart below. Notice that RSI has made a higher low while price action has made a lower low. The ETF, which is short oil and gas, is also extremely oversold. I took a small position this morning.

5 comments:

FeirFactor said...

I've been trying to research this fund to see how and how well it meets its objective of returning twice the inverse of the DJ Oil & Gas Index.

Looks like they credit default swaps to do this.

Do you think this is a good vehicle for shorting oil?

Trader M.D. said...

Nice.

I took a long position in DUG today as well.

I highlighted my entry on my blog today.

FeirFactor said...

Nice call here. I put in a limit order on the DUG yesterday afternoon but it got away from me. I think this is a real good setup.

Vinay said...

Wow, your DUG trade was unbelievably well-timed!

Aviator said...

Great blog and congrats on a well-timed trade. The volume on DUG over the last several days is astronomical.