2024-06-05 17:45:43 ET
Summary
- Following the sharp sell-off over the past two trading sessions, we now see an imminent technical rebound in WTI crude that should present an attractive trading opportunity.
- Taking advantage of UCO's 2X leveraged exposure to WTI crude, we have previously demonstrated how we amplified returns on our bullish view in December 2022 and again in June 2023.
- Once again, we see current levels on WTI crude as a compelling opportunity to re-establish our bullish view. We expect prices to rebound forcefully over the next 1-3 months.
- We see the potential for a 10%-20% rebound in crude oil prices within this time frame, and we target a 2x amplified return through a leveraged exposure using UCO.
- Accordingly, we are upgrading our rating on UCO from "Hold" to a "Strong Buy".
Concerns building up to The Organization of the Petroleum Exporting Countries Plus's (OPEC+) decision to unwind production cuts have driven prices for WTI crude oil futures down to near a 4-month low. OPEC+ members reached an agreement on June 2 to extend existing output cuts into 2025. The group will, however, allow voluntary cuts for some of its members to be unwound gradually beginning in October....
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UCO: Crude Sell-Off Overdone, Watch For That Rebound (Rating Upgrade)