Iran peace deal floods market with oil — short major oil producers
Thesis
A peace deal means Iran will be able to freely sell millions of barrels of oil that have been sitting in tankers. This huge new supply hitting the market will push prices down even further. Big oil companies like Exxon and Chevron make less money when oil prices drop, so their stocks usually follow oil downward. Betting against these major oil stocks is a simple way to play the oversupply crash.
Strategy approach
Build a mean-reversion breakout strategy that enters short XOM and CVX on the 1D timeframe. Entry condition: enter short when price breaks and closes below the lower Bollinger Band (20-period, 2 standard deviations) on increasing volume. Exit condition: cover the short if price closes back above the 20-day SMA, or if RSI(14) drops below 25. Use a 5% hard stop loss.