I'm somewhat encouraged by todays market action, we've recovered nicely after making a new low at 16 1/8. However, I would like to see OIL stop making new 52 week lows every day. I think that the new CEO would have sought to get all the bad news out, and take a large writedown on assets so that forthcoming numbers look much improved (and he can say he turned the sinking ship around).To answer your question, I see OIL as a good turn-around candidate, with the extra sweetener that I give it reasonable chances that it will be gobbled up by a larger oil concern. I'm not outrageously bullish on the oil sector, especially if as it appears, the global economy is headed for a slowdown. However, it is good diversification for my portfolio.Additionally, my entry strategy of selling 17.5 puts was relatively conservative. Like I said, if OIL rallies above 17.5 I pocket the $500+change premium. If it doesn't I effectively bought OIL at 16.5 (not too far from its current 52 week low). If I do get exercised, I will probably continue to work the position (by writing covered calls at 17.5 or 20 )against it to bring my average cost down.Lastly, a move back up to 20 would represent a 20% gain from todays levels. Not a bad risk/reward in a still overvalued market.
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