A Tiny Swing Brings Another Winning Oil Trade

[Trading With Larry Benedict]( A Tiny Swing Brings Another Winning Oil Trade By Larry Benedict, editor, Trading With Larry Benedict A couple of weeks ago, [I wrote about a trade]( on the United States Oil Fund (USO), which tracks the crude oil price. The USO trade generated a handy 21% profit in just two days for members of One Ticker Trader. The theme behind the trade was the huge battle in the oil market. Global demand has remained weak. So OPEC (the Organization of the Petroleum Exporting Countries) has been cutting supply to shore up the oil price. But any spike in the oil price from those cuts has seen a wave of short sellers enter the market. The volatility from these dynamics has created multiple swings… and therefore multiple trading opportunities. We closed another oil trade last week on Exxon Mobil (XOM). It generated a 26.9% profit in eight days. Today, I want to show how we did it… Recommended Link [WARNING: Mandatory U.S. Dollar Recall to Begin on July 26?]( [image]( If you have any U.S. dollars in your bank account… You must see [this shocking video exposing the government’s new plan to recall the U.S. dollar.]( According to Business Insider, this recall “could be imminent.” And if you don’t prepare now, you could end up holding a bunch of worthless U.S. dollars. [Click here to see the three simple steps you can take now to protect your life savings.]( -- One Trade… Multiple Setups The chart below shows the price action of XOM since the start of this year. The 50-day Moving Average (MA, blue line) has tracked relatively flat. But the shorter-term 10-day MA (red line) shows that XOM has had plenty of swings during this time. First, it had a rally into February before retracing in March. Then XOM rallied again in April before reversing in May… Exxon Mobil (XOM) [chart] Source: e-Signal After retracing into May, those swings in XOM became smaller. And XOM began to build short-term support (orange line). Levels like this are really important in testing where the short-term strength lies between buyers and sellers. If a stock tests a support level several times and the level holds, traders become less willing to sell at that level. That gives a stock (or index) a better chance to bounce. The same thing applies to resistance. The more a stock tests a level and fails to break higher, then the less willing buyers are to enter or add to their long positions. In this case, sellers gain the upper hand. 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. With our XOM trade, it wasn’t just the price holding the support level that provided the setup for the trade. As the chart shows, XOM had previously bounced at ‘1’ and ‘2.’ The Relative Strength Index (RSI) formed ‘Vs’ and rallied (left and middle red circle). The RSI then began forming a third ‘V (right red circle). That showed another upswing in buying momentum. Also, the oil price was trading right near short-term support. So on June 20, we opened a long position by buying a call option on XOM. A call option increases when the underlying stock rises. But as you can see, it didn’t go our way right from the start… Take another look: Exxon Mobil (XOM) [chart] Source: e-Signal XOM initially rallied the day after entering our position. But then it drifted for a couple of days before finally bouncing at ‘3’ with another uptick in momentum. Eight days after we entered the position, we saw a good profit (up 26.9%). And the RSI was running into resistance (green line). So we closed out our position by selling our call option. As always, we need to be clear that we generated this return by using options. And with options, we are always dealing with a shrinking amount of time. But just like our USO trade earlier this month, options allowed us to profit in a short time on a chart that some might think offered little potential. Regards, Larry Benedict Editor, Trading With Larry Benedict P.S. Each month, we choose just one trading theme in One Ticker Trader. This helps us focus on one trading opportunity at a time… and profit when stocks get overextended and reverse course. Whether you’re new to options or are simply looking for a new strategy to try, I’d love to have you join me. To learn more, [go right here for the details](. Mailbag One reader wrote in to share his thoughts on One Ticker Trader… Hi Larry, I love your philosophy and service! I just came across it recently, and when I saw it, wham! – this is what I’ve been looking for, for years! Using options, in and out of the opportunity. – Phil V. IN CASE YOU MISSED IT… [Finally, gain financial freedom in 2023 using this method]( Master Trader Jeff Clark achieved financial freedom at the young age of 42. He profited through the massive stock market crashes in 2000, 2008, and 2020 and helped thousands of people, from teachers to doctors, achieve financial freedom… some starting with as little as $100. [Watch his video here and get the name and ticker of the One Stock too.]( [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. 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