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Trade Initiation: Long Oil

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Following NDR Commodity Strategist Matt Bauer's upgrade of oil to bullish, we initiate a Long Oil trade via the US Oil Fund (USO). If we get a favorable surprise on demand via positive economic surprises or on supply via lower Middle Eastern oil, we believe USO will at least revert to its 2023 high of $83 (+15%). If USO breaks below its September 10 low near $67 (-7%), we will implement a stop-loss. We like the oil risk/reward profile and initiate our trade targeting a 15% absolute return for USO, with a six-month investment horizon.

Ned Davis Research | Thematic | Investment | N/A

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