U.S.-Iran tensions ignite the Strait of Hormuz — buy oil stocks for the geopolit
Thesis
The Strait of Hormuz handles roughly a fifth of the world's daily oil supply. With the U.S. and Iran now in a direct military exchange around this narrow waterway, the immediate threat to global supply is the highest it has been in years. Even if the waterway remains technically open, shipping insurance costs will skyrocket, forcing crude prices higher. U.S. oil producers like ExxonMobil and Chevron are largely insulated from these overseas supply shocks and stand to capture massive profit margins as global prices surge.
Strategy approach
Build a trend-following strategy on USO (United States Oil Fund) and XOP (SPDR S&P Oil & Gas Exploration & Production ETF) on the Daily timeframe. Enter a long position when price closes above the upper Bollinger Band (20, 2) and the ATR(14) is expanding. Use a fixed 10-day hold period or exit early if the price closes below the 10-day Exponential Moving Average.