Pullback in Oil a Buying Opportunity

The Dow is hitting a new all-time high again today after a recent rally that has pushed stocks higher.

Until today the rally has left a notable commodity behind - oil.

The price of oil has drifted lower over the last month and the losses are now near the 10% level. This is not a cause for major concern, but rather an opportunity to buy into a commodity that is linked directly to the global economy. A stock market at new highs instills confidence into consumers that in turn increases demand for goods that rely on oil and other commodities.

Now how to play this pullback in oil?

• US Gasoline ETF ($UGA) - Tracks the price of gasoline futures; down 6.5% from the recent multi-year high and sitting on support at the $61.50 area.
• US Brent Oil ETF ($BNO) -Of the 2 oil ETFs, I prefer the one that tracks Brent vs. West Texas as it is a better gauge to global demand for the commodity. Also down approximately 6%, the ETF is on support at the $82 area.
• iShares Dow Jones US Oil Equipment & Services ETF ($IEZ) - Basket of the big name oil service stocks that have been following the price of oil lower in the last two weeks. The ETF is down 5% from a recent high and on support at the $56 area.
• Oasis Petroleum ($OAS) - An independent oil and gas play, OAS is bouncing off support at the $36 area and looks poised to hit a new record high in the near future.

CHART OF $UGA