BOUGHT +34 DUG @30.00

By Paul | Published: December 15, 2008

I entered a short to hedge my longs as planned.  I have been trying SKF a few times previously but keep getting stopped out.  So I’m giving a shot at DUG this time around.  Today S&P broke down to the bottom of my up channel again.  We could very well bounce back, but I needed to hedge my position as planned.

Ultrashort Oil & Gas

Ultrashort Oil & Gas

Upside: Positive divergence on the daily.  Strong support at $30.  Unfilled gap above $34.

Resistance: $31

Downside: Still in downtrend.  EMA shows downtrend gaining momentum.  Oil broke recent downtrend too.

Support: $30

Bottom line:  This is a short hedge to safeguard my longs if the market do break down from here.  As I noted before, this is a distinct possibility I need to account for.  I intend to hold this for several weeks.

Target: At least $34.

Stop:  Observe $25-$26 level.

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