Wednesday, January 07, 2009

Today's Trade: DUG

As noted to Trade Report subscribers earlier today, I entered DUG at $21.19.  The inverse oil services ETF is near strong price support and is very oversold (oil is overbought).  I am using this trade to short the oil sector.

Setup: Oversold bounce.  Stockchastics are way oversold.  The last 6 times they reached extreme levels, profitable trades were there for the taking. 

Risk: My stop is in the $19-20.   My initial target is $24-25.  This gives me a 2 or 3:1 reward to risk.

No comments: