A Trade A Day

Back from vacation, I was scratching my head this morning thinking about where the money’s going to be made in 2008. Taking a look at the weekly chart of the Dow, the pattern forming is ominous.

I see the Dow a shoulder and a neckline break from sub 13000 for 2008. So, I’m going to be seriously looking at short candidates this year as long as the current head and shoulder formation holds.

I am also reminded of an article at stocktradingtogo.com. entitled 13 Great Ways to Invest in Oil Without Buying Barrels. Oil has made some impressive gains in 2007. Crude is up 60% for this year and Blain outlined multiple profitable plays. If you subscribe to the philosophy that what goes up must go higher than I think there are a few trades worthy of consideration in this sector.

Let’s take a look at crude as it stands today.

After a major cup and handle style correction that began in 2006, crude oil has had it’s first correction after breaking out in September of 07. Oil can’t run up forever without causing serious problems for the US and World economy, but I think crude can go 20 or 30 more dollars before us pleebs take notice.

If you don’t want to trade crude futures (and I don’t blame you), here are a few individual stock trades for you.

USO is an etf that tracks the price of oil. So, you won’t be able to get the leverage of a futures contract, but at least you’ll be able to sleep at night.

XOM is a bit of a slow mover, but the ascending triangle is unmistakable.

CVX is in the same ascending triangle pattern as XOM.

Of course, the post wouldn’t be complete without a short candidate. As I mentioned at the beginning of this post the Dow’s current price pattern looks like shorts may be the way to go in 2008. CLB has topped out and is correcting in the form of a bear flag. I like it under the 115 area.

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