Sell Alert: June 17, 2013

Sell Alert:  June 17, 2013

 

Option Strategy:

Sell to close the US Oil Fund (USO) July 2013 $33 Puts.

 

Commodity Outlook:

An unexpected geopolitical development has greatly increased Middle East uncertainty over the past few days.  As you may know, the US announced a plan to back Syrian rebels late last week. 

This decision is already leading to a big spike in Middle East tension.

As a result, crude is running higher as traders build a “fear premium” into the market.

What’s more, the $97.50 resistance area I outlined in the original trade alert has been broken.  As you know, we were using that area as a means to control risk in our trade.

With that important technical level broken, it’s time to close our trade completely. 

Go ahead and sell to close our July 2013 $33 put trade.

Folks, this is an unfortunate development for us as the global supply/demand fundamentals for oil are still decidedly bearish.  Weak fundamentals should be sending prices lower.

However, we can’t fight growing Middle East tension.  Oil could be carried well over $100 a barrel in the near future if the Syrian crisis escalates further.

Be on the lookout for another Commodity Profit Hunter trade in your e-mail inbox soon!

 

Category: Commodity Trading