Hi Shoppers,

I think oil is ready to bounce from here.

Here is the chart for the Oct. Crude Oil Futures:

Thursday’s candle could be an inverted hammer which may be signaling a reversal of the recent downtrend.

It has also held my support line just under $86.

Looking at the Energy Select Sector (Ticker: XLE) chart, Thursday’s candle has formed a hammer with confirmation on Friday:

I think XLE could trade back up to $83 and possibly $85.

I like buying the Sep16 calls:

The implied volatility is a tad high, so I would wait for the stock to trade higher and maybe wait for some premium to back off in these calls.

I do like buying the 81 calls and then, after the stock trades higher, possibly selling the 86 calls against them to bring down my cost.

At least with options, you will find a buyer.

Thanks for Reading … See You Next Tuesday.

Licia Leslie