DUG broke my $25 stop yesterday. I gave it some room because of the recent $6 / share distribution on Dec 22. So that effectively shifted the chart by 6 points. However, the Crude Oil broke above it’s 20-day MA and is showing signs of strength, Figure 2. So I decided to get out of DUG as my short hedge and move into SKF.
My DUG shares were bought for $30. Distribution was $6.06. So my net lost per share on this trade is [($23.44 + $6.06) - $30] = -$0.5. Which is a total loss of $0.5 * 34 = $17 + $10 commission. It’s basically a breakeven trade.
UltraShort Oil & Gas
US Oil ETF
As I was saying, I replaced DUG with SKF as my short hedge. We are testing the Oct support on SKF. Furthermore, despite the S&P breaking above the down channel this week and along with SKF’s distribution, SKF is still above the psychological 100 level.
UltraShort Financials
Stop: $96, the October support.
Target: $120, a congestion zone.
Bottom line: This is merely a short hedge play so I actualy don’t hope for big gains on this.
Related posts:
My name is Paul and I am a full-time engineer, part-time trader. Back in 2000, I deposited my $5000 interest-free student loan with an online broker. Since then, my interest in trading has become an obsession.
One Comment
Well said Great information, keep up the great work!