Is Oil Ready for a Pullback?

Licia Leslie

Hi Shopper,

Is oil ready for a pullback?

And could this be your chance to strike it rich?

You see, Brent Crudejust traded at its highest level since October of 2014 at $88.51 …

And West Texas Intermediate touched $86.61 yesterday …

A drone strike hit three tankers in Abu Dhabi creating supply worries from the world’s seventh biggest oil producer, which pumps more than 4 million barrels a day.

The Russian situation with Ukraine has also put upward pressure on oil.

And Goldman Sachs is predicting Brent to trade over $100 by 2023.

The economic recovery envisioned with the end of the pandemic is further driving oil prices higher.

Yesterday, the U.S. Energy Information Administration (EIA) reported a record high output forecast for February.

The Biden Administration has requested the Federal Trade Commission (FTC) to investigate the oil and gas companies for any illegal conduct that would cause higher prices at the pump.

Occidental On Purpose

The oil futures are trading at new recent highs, but looking at Occidental Petroleum (Ticker: OXY), I am seeing a possible doji that may by signaling a change in this uptrend:

After running up from that classic hammer on Dec. 20 – from $26.05 up to yesterday’s high of $36.93 – OXY may be ready for a pull back.

I think OXY can trade back down to $33.30 and even possibly down to $31.00, closing that gap on January 4.

Looking at the puts, I like next week’s Jan. 28 expiration:

- - If OXY opens and trades lower today, I will be a buyer of the Jan28 36 puts and I will pay up to $1.35.
  - I will take my loss on these if they trade below $.95 and begin profit taking at $2.35.
  - My last frew chart readings did not pan out (PFE, IEF, CVX) or trigger any new trades – but we live to trade another day!