I wanted to highlight one of the stocks on my buy list displayed on the right hand side of my blog. USO attempts to reflect the changes in percentage terms of the spot price of West Texas Intermediate (“WTI”) light, sweet crude oil. Their portfolio consists of listed crude oil futures contracts and other oil related futures, forwards, and swap contracts.
Why is USO a buy? For one this is the season when no one pays attention to oil. The driving season has long past. The warmer winter and surplus oil has pushed the fund to an all time low. However, the same factors that drove up the funds price last summer will most likely come into play this summer. It would be redundant to rehash all the factors that drove up oil last summer, political, natural, and supply but we have every reason to believe none of those have been eliminated. They are only temporarily out of sight and out of mind.
I expect USO to be relatively flat for a few more months. This is not a short 1-2 month trade. Past performance shows the best time to sell an oil based stock like this is mid to end of summer. Rather than try to time the upswing of USO I would like to start accumulating shares from now until March. I believe under $50 is a good buy. You can view the funds current holdings at their web site http://www.unitedstatesoilfund.com/
4 comments:
Hey Green - like the blog. Finally got this thing working.
As to the USO rec - yep - all it'll take is sharp turn in the weather or an international terrorist event (God forbid)or something similar and oil will spike again. USO is a safe LT play.
Hey, my first responder. Thanks...makes me know I'm not just talking to myself...Yes I think there we will do well buying counter trend.
Range: 1d 5d 3m 6m 1y 2y 5y max Type: Bar | Line | Cdl Scale: Linear | Log Size: M | L
Compare: XOM vs S&P Nasdaq Dow
Some of my other out of favor oil picks: XOM, CLB, COP, VLO.
I don't know if chart will copy, we'll see.
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