Oil prices crashing on US-Iran peace deal — load up on consumer stocks
Thesis
Cheaper oil means lower costs for shipping, transportation, and everyday goods, which is great news for consumer-focused businesses that depend on people having extra money to spend. When the price of fuel drops this fast, retailers, airlines, and entertainment companies usually see their profit margins improve almost immediately. Because the market is initially distracted by the political side of the deal, the stock prices of these everyday companies haven't fully reflected how much money they are about to save. You can buy in while everyone else is still digesting the headline news.
Strategy approach
Build a mean-reversion strategy that enters long XLY (Consumer Discretionary ETF) on the daily timeframe when the 14-period RSI drops below 55 and price is above the 50-day SMA. Target a 2% profit and use a 3% stop loss, with a maximum hold of 15 days.