I only started watching the markets after 12:00 EST or so today, and by then it was clear we were having another down up down flat down day. So, I was a little disappointed, but in general fine with not making any trades today.
Then, towards the close, I had an idea. I thought to myself, gold, natural gas, and oil are the only up sectors I see. Why not go long a decent looking oil stock about now? The theory being, as people shore up their positions at the end of the week, they’ll pull money out of a bad sector and throw it into a good one.
Was my theory correct? I don’t know. I’ll note that the gold and oil indices I watch closed on their highs for the day. But, I guess I would have expected the weaker sectors to get even weaker, and I didn’t see that.
Anyway, I chose Occidental Petroleum Corp. (NYSE: OXY), since it had consolidated and was breaking out on the upside. The breakout stalled, but didn’t get anywhere near my stop. Sure enough, right at the end of the day, it surged up for a bit. But, since I never trade at EOD, I was skittish, and just grabbed a few cents of profit (0.2R) I could have gotten 0.4R if I had been just a tad more patient. I may keep making small bets on ideas like this and see if they continue to work out for me.
Here’s the chart (click to enlarge):
If you compare OXY to the DIA/SPY and $XOI, you can see that the biggest dip agaist me corresponded to a time when the markets and oil in general were down. But, oil rebounded, and I was able to stick with it until it based under my entry and broke through it again.
| Stocks Mentioned In This Article | |
|---|---|
| Stock | Links |
| OXY |  |  |  |
