By: Tom Gentile
on February 14th, 2023
Happy Bullish Energy and Oil Day!
Wait, what? Isn’t it Valentines Day you may be asking? Yes it is.
But it is also the start date for what I have studied and come to know as a seasonal pattern I deem the Bullish Energy and Oil Pattern.
It isn’t so much a day, but rather a 5-month batch of days where Energy and Oil typically trades higher in price.
I use the ETF USO, which is the United States Oil ETF as my representation for Oil. The United States Oil Fund (USO) seeks to provide investment results corresponding to the daily price movements of West Texas Intermediate (WTI) light, sweet crude oil.
It is deemed more suited for short-term investors who can regularly monitor their positions and who are bullish on the short-term futures contracts on WTI crude oil.
As Investopedia.com states, because the ETF’s benchmark is the WTI crude oil futures contract, the fund may experience *Contango when rolling the futures contracts. That situation is deemed unfavorable for long-term investors, which is why the assessment is USO is better suited for short-term investing.
The Bullish Pattern on Oil
The pattern runs between mid-February to mid-July, and it has worked more often than it doesn’t. In fact look at the info from my 2023 Energy and Oil Opportunity report found here www.tomgentile.com.
USO started trading in April of 2006.
The range of months this sectors bullishness occurs more so than any other consecutive 5-month period of time is mid-February to mid-July.
The first year for USO’s existence had it available in April do we can’t use that year when compiling stats for how USO performed since its inception.
That gives us 16 years where we can provide statistics.
Remember, I am using USO as my representation for this seasonal bullish pattern.
In 12 of the past 16 years, we can use that 5-month period of time, USO has traded higher. Meaning the closing price on the 16th of July (give or take a day or two) was higher than the opening price on the 14th of February (give or take a day or two) all but 4 years since 2007.
That is a success rate of trading higher over this period of time is 75%. That is an acceptable rate of success for me that has me gearing up for bullish option opportunities in energy and oil every year.
Even the first year USO started trading, the open price on April 17, 2006, to mid-July of that year USO traded higher.
This is what the chart looks like for USO. The move from the beginning to the end of the 5-month seasonal time frame saw USO trade higher in the close to a 15% higher result.
Note: Even though one can trade the securities themselves, my team and I are options traders and so we look to initiate bullish option trades on these instead. We like to go for a better ROI on our money and options allow us the chance to do that.
App: Toms Option Tools
Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.
Other times I will have other charts may work to amplify my educational points.
Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.
Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.
Stock and options trading has large potential rewards, but also large potential risk.
You must be aware of the risks and be willing to accept them in order to invest in the stock and options market. Do not trade with money you cannot afford to lose.
This is neither an offer to buy/sell/ or recommend a particular stock or option.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been actually executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with hindsight.
No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Disclaimer of Warranties and Liabilities Tom Gentile and TomsTradingRoom, LLC including employees, consultants, and editors (“Publisher”) cannot and do not warrant the completeness or accuracy of the content found in our areas, or its usefulness for any particular purpose.
Tom Gentile and TomsTradingRoom, LLC also make no promises that our content or the service itself will be delivered to you uninterrupted, timely, secure, or error-free. Under no circumstances will Tom Gentile and TomsTradingRoom, LLC be liable for direct, indirect, incidental, or any other type of damages resulting from your use or downloading of any content on our site.
This includes, but is in no way limited to, loss or injury caused in whole or in part by our negligence or by anything beyond our control in creating or delivering any portion of Tom Gentile and TomsTradingRoom, LLC.
You are agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that Tom Gentile and TomsTradingRoom, LLC will not be liable for any I, investment decision made, or action taken by you, or others based upon reliance on news, information, or any other material published by Tom Gentile and TomsTradingRoom, LLC.
Tom Gentile and TomsTradingRoom, LLC relies on various sources of information that we believe to be accurate and reliable. However, we make no claims or representations as to the accuracy, completeness, or truth of any material contained on our site.
Tom Gentile and TomsTradingRoom, LLC are educational portals, providing content for educational and informational purposes only. Neither Tom Gentile nor TomsTradingRoom, LLC are a broker/dealer. Investors need a broker to trade stocks and options and must meet certain requirements. All securities, futures, and investments data and ideas are offered to self-directed investors. All prices in USD unless noted otherwise.
A full disclaimer can be found here: http://www.tomgentile.com/legal_disclaimers.html.