The chart for UCO is based on WTI but it looks a little different from the actual futures chart , I combined the futures chart from WTI+BRENT at base , I think that’s a better perspective .
I see a potential trading range vs our climax candle with a wide range so sell the top third , buy the bottom and scalp .
I am shorting this instead of longing SCO because get contango decay/ leveraged decay to a greater extent than longing SCO ( assuming I am right that is ) . Less favorable for tax on gains though .
Additional points:
COT data ( futures positioning) hints that we are beginning to get crowded on the long side . That could really fuel a drop in oil prices if all of a sudden there’s a good reason to take profits or a bad reason/news failure kind of situation where news supports increasing oil price but we see the opposite actually occur …
It represents a massive, rapid shift in futures contract positioning from near record lows in 2025 to multi-year highs in just several months.
I am contrarian in a lot of my plays and I think that, while this could definitely prove me wrong and or require several tries, it could also become a great reversal trade .