Oil Nears Resistance: SCO And UCO
PikerTrader | Dec 30, 2012 01:31AM ET
Oil is nearing resistance as it moves towards its 200 ema and resistance from the broken support in October. This level was also capped by the 200 ema and the 91.47 level. A breakout of above the 200 would be bullish for oil.
Bullish Play (UCO): One way to play an Oil breakout is UCO. It has been capped at 29.08 just like Oil at the 200 ema. A break of this would be bullish and potentially move UCO upwards to 31.
Oil failing here is possibility with it easily moving down back towards 88.86, as this is support level for the last breakout. While this could mean nothing more then a pullback a move below the 88.86 level would be strong and could potential move oil back towards its lows at 84.50.
Bearish Play (SCO): One way to play and move lower in oil is the SCO (oil short). It is showing support at 40.66 and has the potential to make a 5% move while oil drops back to 88.86. If oil was to make a longer move towards it would put SCO to about 47. Of course all these changes as this is a double inverse etf and has time decay, but the idea is there.
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