How We Banked a 41% Profit From Out-of-Favor Oil

[Trading With Larry Benedict]( How We Banked a 41% Profit From Out-of-Favor Oil By Larry Benedict, editor, Trading With Larry Benedict The oil price took a hit back in July due to nervousness about a slowing U.S. economy. From its peak to early this month, the United States Oil Fund (USO) dropped by over 15%. (USO tracks the crude oil price.) But that sharp sell-off put USO close to oversold territory. And its down move looked overdone. USO appeared to be setting up for a potential bounce… ([I wrote more about oil finding a foothold last week]( That’s how subscribers to my Opportunistic Trader advisory banked a 41.2% gain in just 10 days. So let’s check how we did it… Recommended Link [The Perceptron Is BACK]( [image]( Ever since Jeff returned as CEO of Brownstone Research, one of his biggest priorities has been relaunching his AI project: the Perceptron. During a special event on Wednesday, September 25th at 8 PM (ET), he’ll reveal: - How the Perceptron can spot an “invisible” 60-day pattern in the crypto market - How you could use it to make large windfalls while Bitcoin bounces up and down - The name and ticker of his latest buy – FREE [Register here for free]( -- A Repeating Pattern On the chart of USO below, you can see that the sell-off began in July. It traded in a tight range through the middle of August. Then the down move accelerated into the start of this month. But that rapid sell-off pushed the Relative Strength Index (RSI) near oversold territory (right brown circle): United States Oil Fund (USO) [chart] Source: eSignal ([Click here to expand image]( We were looking for a repeat of the same pattern back in June (left brown circle). Back then, we grabbed a 39.7% profit in just two days when the RSI formed a ‘V’ and rallied from oversold territory. And our recent USO trade had one other factor… USO was also approaching a key support level (around the $66–67 level). That, along with the RSI rallying from oversold territory, would give greater energy to a recovery. So on September 6, I recommended buying a call option. A call option increases in value when the underlying asset rallies. But we went slightly too early with the trade… Take another look: United States Oil Fund (USO) [chart] Source: eSignal ([Click here to expand image]( USO drifted lower over the next couple of days before bottoming out. After that, though, it finally began its rebound higher. That rebound coincided with the RSI rallying from oversold territory – just like back in June. USO continued to rally as momentum steadily climbed. With our position in good profit and the RSI approaching resistance (green line), we sold our call option on September 16. Free Trading Resources Have you checked out Larry’s free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. The Power of Options We captured this 41.2% gain in 10 days using options. Options magnify gains and losses compared to just trading shares. The trade-off is that options have a finite life. Time decay erodes the value of your option until it eventually expires. But if you can catch a move like we did here, you can quickly bring in incredible profits. And mean reversion helps us identify when a stock has overstretched in one direction. We aim to profit when it snaps back the other way. By combining these types of sharp moves with options, we have a powerful strategy that can make a big difference in our trading account. Regards, Larry Benedict Editor, Trading With Larry Benedict IN CASE YOU MISSED IT… [Shocking Footage of Bill Gates’s $100 Billion Property]( When I heard that Bill Gates was spending $100 billion on [this new AI project in Wisconsin]( I couldn’t believe it. So I decided to fly over there to see it with my own eyes. And what I found was really mind-blowing. [Click here to thee footage of what I uncovered]( Because I believe this will help trigger the next phase of this AI boom. [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. The Opportunistic Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](