Book Short-Term Double-Digit Percentage Gains in our Oil Fund and Options

Oil has done what we expected it to do over the last 7-10 days, so let’s bank our gains and look to reload. Upon receipt of this special alert for ETF Trader’s Edge, sell your United States Oil Fund LP (USO) position that last traded at $8.83, roughly 13% above our buy price, and the USO March $8 calls (USO160318C00008000), which last traded at $1.10, almost 50% above our buy price.

A rally of more than 10% in the price of oil during the last six trading days is giving us reason to expect a pause in the action. While the news of coordinated efforts among oil producers is positive, so far nothing concrete has been done and this rally looks to be based on hope. Furthermore, the time decay in our March calls will begin to work against us if oil declines or remains at these levels. We still, however, believe oil has begun the bottoming process. So be on the lookout for further alerts as we will look to reload with a new buy recommendation in oil at more favorable levels.