With the Saudi drone strikes behind us, where can crude oil prices go next? And what other markets could the spike in oil prices influence? I delve into these and other questions in today’s Hawkeye update.
Crude oil has spiked up to the first resistance zone around $63-$64, which has contained the initial reaction to the weekend news event. Both Saudi and US officials said they will open strategic oil reserves to fill the supply gap, hoping to curb the rising price of oil. Saudi officials report that the production should be back online within 48 hours.
So the potential for oil to continue to rise, in my opinion, is good. I show two previous highs that mark potential targets for higher oil prices: $67 from the April 2019 high, and $78 from the October 2018 high.
Other implications can be found in the Defense and Energy sector ETFs. The ones I noted are $XAR (SPDR S&P Aerospace & Defense) and $XLE (SPDR S&P Select Energy). I also see intraday potential in leveraged ETFs, like OILU (ProShs UltraPro 3x Crude Oil) and OILD (ProShs UltraPro 3x Shrt Crude).
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