Extreme Turn Signal

Crude oil has pulled back recently from the high $50s and many energy ETFs have followed lower. The move created an extreme-turn (ET) signal today in the SPDR S&P Oil & Gas Explore & Prod ETF (Symbol $XOP). Visually the signal occurred at a symmetrical double bottom adding strength to the signal.

The Trade

Since we had stacked signals, we chose to also express the trade in two parts using the April $28 and $30 Calls. This is “called” a Call Stupid.

Result

$XOP has rallied 8% since entry resulting in a 100% return in the April $28 Call and a 50% return in the $30 Calls. We updated our position here.