Oil And Oil Stocks
Yesterday I posted my observations about oil and oil stocks. I mentioned how oil stocks seem to be acting much stronger than crude oil futures. Well we saw that again today and I was able to make some money on the long side with these oil stocks.
On the open I noticed crude oil was down (again) but these oil stocks seem to be opening firm so I bought the strongest ones and they all rallied throughout most of the day. TSO was the big mover 2 days ago so that was the first stock on my list to buy and it turned out to be a decent trade.
If you look at the above chart you can see this bullish divergence that has taken place over the last few days.
I'm looking to continue playing these oil stocks from the long side based on the relative strength I am seeing. I think if crude oil can just rally a little these oil stocks will really fly.
Posts
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_4.gif)
![[Most Recent Charts from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_4.gif)
![[Most Recent Exchange Rate from www.kitco.com]](http://www.weblinks247.com/exrate/24hr-euro-small.gif)
4 comments:
Great trades. You post some great analysis.
Thanks bubs
Kevin,
Congrats on your trade! I have, however, a contrarian view on the relationship between oil and oil stocks. I believe their spread will revert sooner or later, i.e. oil will go up relative to oil stocks in the next half year. See my articles on this topic here: http://epchan.blogspot.com/2006/11/cointegration-of-oih-with-spot-oil.html
BTW: I enjoy reading your blog!
Ernie
Thanks Ernie,
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