Potential Oil and Commodities Boom?

 

Date: 2/22/2023
Author: Chris Hood

 

 


I shy away from long-term forecasting.

I’d rather stick to my charts and trade on short-duration time frames – particularly when the market is choppy and bearish.

We’re currently in such a position.

However, I do have a Ph.D. in economics and I get the sense something massive is brewing…

…and technical analysis can be applied to daily, weekly, or even monthly charts.

In the trade room today, we had a discussion on my outlook for the rest of the year with a focus on oil and commodities.

Now I can’t tell the future, but I’ve been at this for quite a while.

So I want to put something out that requires your undivided attention.


 

Yesterday, Corey Synder went live with Emmy Award-winning journalist Seth Allen for American Oil Fortunes to demonstrate precisely how this one surprising stock could hand you a 1,000% return – or greater – over the next 12 months…

All you have to do is click this link right here to watch the replay of American Oil Fortunes.

 


No matter what the green energy crowd believes, the world simply cannot operate without oil. It fuels our vehicles, and industries, and is used in millions of products we hardly consider.

I prefer not to trade oil itself, but companies like CVX, XOM, and OXY that refine and distribute it.

Those are always on my radar.

There’s a potential for some massive upside in oil and related stocks if we consider the weekly chart of light crude futures.

Look at the chart below.

 

 

Notice that we saw a huge spike in price back in June of last year then a steady decline to our current level of between $70-80.

This choppy pattern after a drop is known as consolidation.

Notice that we’ve failed to break through that $70.40 green band and are stuck in a red resistance zone.

Range-bound consolidation is typically followed by a massive move up or down.

From the chart, it appears far more likely that we’ll move through resistance to the upside than to crash downward breaking multiple levels of support (green bands).

With a bullish break above $85.00, we would likely see a move to the next resistance of $94.00. And then potentially higher.

How high remains to be seen. But a run to over $100.00 is not out of the question.

As a former banking executive, I rarely believe anything analysts say. However, I have to agree with Morgan Stanley’s prediction on this one.

Oil is a volatile commodity, and it can move quickly.

Remember, oil is highly dependent on geopolitical events, so it’s difficult to predict exactly when this move could happen.

However, I think there will be some massive opportunities for traders and investors.

If they pick the right stocks, that is.

I won’t go through a chart analysis on the commodities – there are too many.

But inflation is still with us.

People are lined up at the soup kitchens in Canada, and anyone paying attention knows that supermarket prices aren’t dropping.

Commodities have historically been used as a hedge, both against inflation and a safe haven when the equity market collapses.

Yesterday’s dramatic drop doesn’t give me much hope for the return of the bull market.

Certainly, commodities are influenced by weather conditions, transportation, and other factors, but an inflow of capital there seems reasonable.

Take a look at the daily or weekly charts for sugar (CANE), copper (COPX), and soybeans (SOYB) if you need some confirmation.

I’m not taking any position until my tools give me an entry signal.

But they’re definitely on my watchlist.

Cheers,
Chris Hood

PS – Yesterday, my colleague Corey Snyder went live to talk about this exact topic, and revealed over a DOZEN critical stock plays to make right now if you want the best possible chance of harnessing the $15 Trillion market shift…

Including the one stock that’s perfectly positioned to deliver a potential return of 1,000% or more over the next year.

This broadcast will only be available for replay for a limited time, so watch now.

 


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