UPDATE: Profit Area for Long OIH Trade

Tuesday, November 10, 2009

I posted a great trade idea in OIH back in April this year. The current prices were my first target for the trade. The gap down from $125 has now been filled for a 42% return off purchases made at the $88 breakout price. This has been an excellent trade and it is always wise to take some off the table after such a large gain.

I expect more upside in crude oil itself so the OIH can certainly see higher prices. In the long-term I expect the OIH to trade much higher but I believe the great risk/reward momentum trade off the lows is now completed at the gap fill. As I like to say, the object is "to make money, not to make the whole move". The ETF can go higher but there is no sense risking our gains after a 60% bounce in the equity market.

Feel free to hold some of the position but I am effectively closing out the trade at this juncture.


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