Public trading strategy
Peace deal means more oil supply — short energy and oil names
Thesis
A peace deal in the Middle East is reopening shipping routes, which prompted Iraq to push its oil production back above 3 million barrels a day. When big producers flood the market with extra supply, prices tend to fall because there is more than enough oil to go around. This creates a tough environment for oil companies, making energy stocks vulnerable to a pullback as profit margins shrink.
Strategy approach
Build a mean-reversion short strategy on USOIL (WTI Crude) using the H4 timeframe. Enter short when price crosses below the 20-period SMA and RSI(14) crosses below 55. Exit when price crosses back above the 20-period SMA or after a 10-day max hold. Use a 2% stop loss.