Commodity Chart of the day
Daily Heating oil
(Click to enlarge)
Heating oil, diesel, #2 whatever you want to call this commodity to me it appears a base if forming. I cannot stress enough that past performance is not indicative of future results but for over two decades the price of heating oil has bottomed on or near the third week of June. Will this year be different? Time will tell.
Let's look specifically at this year. August futures have come off 20% in the last 3 months, currently trading very close to the levels seen 9 months ago. I think as traders we should do the same thing physical energy users are doing locking in prices at these levels on the anticipation of prices rising in the coming months. Whether it is a futures play or options play I suggest gaining long exposure with a 2-4 month time frame.
If the current lows give way I would abandon the bullish strategy but I do not expect that. From here I see prices trading up to the white dotted lines on this chart which serve as Fibonacci levels.
Disclaimer: The opinions contained herein are for general information only and not tailored to any specific investor's needs or investment goals. Any opinions expressed in this article are as of the date indicated. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
