Oil prices crashing on Iran deal flood of supply — short oil producers and energ
Thesis
The US-Iran agreement to reopen the Strait of Hormuz is expected to flood the market with new oil supply, and Wall Street banks are already slashing their price forecasts. Oil has plunged 15% in just four days, and this kind of fundamental shift usually means lower prices are here to stay for a while. With Iran gaining the right to sell oil immediately and tap a massive development fund, the increased supply will likely keep pressure on oil-related investments. Betting against oil producers or the commodity itself is a way to profit as prices adjust to this new reality.
Strategy approach
Build a short-side mean reversion strategy on OIL (or USOIL CFD) using the H4 timeframe. Enter short when price breaks and closes below the lower Bollinger Band (20, 2) with expanding volume, and RSI(14) < 45. Set a 2 ATR stop loss above the entry swing high. Exit entirely if price closes back above the 20-period midline Bollinger Band.