Public trading strategy
Oil spikes on Middle East tanker attacks — momentum play on oil before Saudis fl
Thesis
Bloomberg reports a tanker was hit in the Strait of Hormuz, causing oil to jump, while Barron's notes futures are pricing in renewed conflict risk. However, just days earlier, Yahoo Finance reported Saudi Arabia was prepared to slash prices if Hormuz reopened. The trade thesis is to play the current fear-driven momentum in oil to the upside, but keep a tight exit because if the ceasefire holds, Saudi's readiness to cut prices could cause a violent snap back downward.
Strategy approach
Build a momentum strategy on D1 timeframe entering long USOIL when price closes >2% above the 5-day EMA and the 20-day ATR expands by >15% from its 10-day average. Exit condition: price closes below the 10-day EMA, or 10-bar max hold. Include a 3% trailing stop.