Subscribe to Money Morning get daily headlines subscribe now! Money Morning Private Briefing today's private briefing Access Your Profit Alerts

Forget the Recent Oil Dip – This Pattern Calls for the Bulls

I want to talk to you today about something we haven't discussed in a year…

Oil.

But it's not the falling prices or crude inventories reaching record highs that's got my attention. You see, it's been one year since we exploited this seasonal pattern on oil for over 435% gains.

And now another one is forming…

So here's how to profit.

How to Bank Triple-Digit Gains on the World's Most Traded Commodity

As a Valentine's Day gift to my wife, I recently purchased a Tesla that's slated to be delivered in March. The ironic thing about this is that I plan to "make my money back" on an electric car – using oil.

And you can do the same…

As someone who's been trading for over two decades, I'm a patterns guy. I look for the historically-proven, back tested patterns in the stock market that could offer triple-digit gains (or more). Many of these are what I call "seasonal patterns," which means they happen, without fail, during very specific times of the year. And what I identified about oil is that it makes its price gains in the spring and summer months. In fact, oil has made nearly a 10% bullish price move during this time frame 75% of the time – for the past 16 years.

That's compelling enough to set up some trading opportunities. But let's take an even closer look…

Oil stocks and exchange-traded funds (ETFs) had a solid year in 2016. Now I like ETFs even more than stocks because they let you trade the entire sector instead having to sit and choose the right stocks to play. So what I primarily focus on when it comes to oil are United States Oil (NYSE Arca: USO), the VanEck Vectors Oil Services ETF (NYSE Arca: OIH), and the Energy Select Sector SPDR ETF (NYSE Arca: XLE).

For example purposes, we're only going to look at how these three moved between Feb. 15, 2016, and July 15, 2016. And during that time frame, XLE moved from $55 in mid-February to a peak of $70 just before mid-July. That's a 27% price climb during this seasonal pattern, which you can see in this price chart…

ppt-1-xle Over that same period, USO went from $8.25 to a peak of $12.25 – a 51.5% gain for the duration of this pattern. Take a look…

ppt-2-uso And the story was much the same for OIH, which went from $22.50 in mid-February to a peak of $31 just before the middle of July, which is a 37% increase in a matter of six months…

ppt-3-oih As you can see, all three of these performed quite well exactly when this pattern said they would. And now, things like OPEC cuts and the Iran sanctions will contribute to the demand for oil. Also, on the domestic front, the Northeastern United States has been getting battered by winter storms, which don't seem to be stopping any time soon. Mind you, these northern states really feel winter all the way through March – about a month into this pattern. And with frigid temperatures and two feet of snow getting dropped on people's lawns, you better believe oil will be in high demand.

So from the trading perspective, you're looking at even more profit opportunities with even bigger gains potential.

And at 4:15 p.m. EST next Thursday, Feb. 23, I'll be revealing three trades exclusively to my Money Calendar Alert members that could deliver 533% total gains. To find out how you can join, just click here.

I hope to see you there…

Good Trading,

Tom Gentile

The post Forget the Recent Oil Dip – This Pattern Calls for the Bulls appeared first on Power Profit Trades.

Join the conversation. Click here to jump to comments…

About the Author

Tom Gentile is one of the world's foremost authorities on stock, futures and options trading.

With more than 25 years' experience trading stocks, futures, and options, Tom's style of trading systems and strategies are designed to help individual investors propel themselves past 99 percent of the trading crowd.

Read full bio

Leave a Reply

Your email address will not be published. Required fields are marked *

Some HTML is OK