Long Oil? Then get Long the USO and DIG

Oil Prices

In the last three months The United States Oil Fund LP (ETF) (NYSE:USO) has increased 15% and the ProShares Ultra Oil & Gas (ETF) (NYSE:DIG) has ran up 40%.  The Oil ETFs may be just beginning to run.

Oil ETF a Good Long-Term Buy - USO is likely to test its 52-week high |Sam Collins, Chief Technical Analyst, InvestorPlace

(http://www.investorplace.com) United States Oil Fund LP (NYSE:USO) — This exchange-traded fund (ETF) tracks the performance, less expenses, of the spot price of West Texas Intermediate light, sweet crude oil.

In August, USO turned the corner after forming a double-bottom and rallied through its bearish resistance line in late September. Since then, it has established a tight and orderly bull channel, and yesterday flashed a new golden cross (the 50-day moving average crossed through the 200-day moving average) for a strong buy signal.

But several days ago, the price reversed from the top of the channel and will most likely retreat back to the conjunction of the 50- and 200-day moving averages where it is a buy at $36.

The target for a trade is north of $39, which marks the top of the channel, and longer term it is likely that USO will again test its 52-week high at just north of $42.

SOURCE: http://www.investorplace.com/25149/etf-picks-united-states-oil-fund-lp-u...

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