Energy Stocks
Courtesy of Allan
In keeping with our sector theme, below are some energy-related ideas across different time frames to illustrate how trends can make great swing trading vehicles regardless of time horizons.
Occidental Petroleum will always have a place in my heart. It was the summer of 1978 and I was on vacation in Chilmark, Martha’s Vineyard. During a rare bout with sobriety I purchased some OXY options that tripled in value in the ten days I was on holiday. This was a time before personal computers, cell phones, or instant quotes, just me, a transistor radio on the nude beach, a dial-up phone at the cottage and a Merrill Lynch broker in Atlanta. The birth of a career, a passion and a new found respect for lucidity even when all those around you are crumbling into chaos and debauchery.
The investment will seek to replicate, net of expenses, twice the inverse daily performance of the Dow Jones AIG Crude Oil Sub-Index.
Note the pattern of whips-saws followed by huge percentage gains. Discipline and money management are all that need be added to this model.
SCO_15 Trend Model
Although I don’t presently trade this 15 minute model, the chart makes a compelling case for doing so.
Market Notes: I am not going to use the C word today, but the elements are building and I’ll likely be going into a more detailed evaluation of the potential in my Weekend Update.
Allan’s “Trend Following Trading Model” is based on his trend-following trading system. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here. For more details, read this introductory article.