Still Time to Profit on Oil with This ETF

09/30/2009 12:01 am EST

Focus: COMMODITIES

ProShares UltraShort Oil & Gas (DUG) - This exchange traded fund (ETF) seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Oil & Gas Index. 



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Since the bottom in crude oil in early March, this double-inverse ETF has been in a steep decline. Recently, though, crude oil has shown signs of turning down. And if it continues to decline, DUG could be a good speculation. 

However, with the exception of a buy signal from the Moving Average Convergence/Divergence (MACD), there is little to indicate a top in oil. 

Nevertheless, buyers at this level could get a trade to the 50-day moving average at $16, and then the downtrend line at $19.

By Sam Collins of OptionsZone.com

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