Everyone’s watching the Iran situation and looking at the oil sector.
That’s the obvious trade…
WTI Crude oil passed $100 per barrel again on Monday, March 16. And Iran maintains that the Strait of Hormuz is closed to the country’s enemies.
As a result, oil and gas stocks are trading higher.
United States Oil Fund (NYSE: USO) is a popular example right now. Prices have been extremely volatile ever since the war erupted:
But the obvious trade is rarely the best…
Right now, while every options trader in the market is fighting over the same energy contracts, a quieter setup is taking shape.
One with just as much exposure to the Middle East instability, but with far less competition.
This connection isn’t immediately obvious. And as a result, prices have yet to catch up…
That’s our sign to make a trade.
What the Market Is Missing
The Strait of Hormuz isn’t just an oil chokepoint.
A third of the world’s fertilizer supply moves through the same passage.
Mainly nitrogen and phosphate… these raw materials feed global agriculture. And they flow through a corridor that’s currently sitting in the middle of a geopolitical firestorm.
When supply chains are disrupted or threatened, the downstream effects are almost obvious. Oil already spiked… and anything else that trades through Hormuz is destined for the same fate.
Most traders haven’t connected the dots yet, and the media is still running oil segments daily.
The lag between what’s actually happening and what the market has priced in, that’s where we can make a lot of money.
The Setup
The stock I’m watching made new 52-week highs on Friday, March 13.
Since then, the price consolidated sideways just below that level. It hasn’t given back the breakout, and it hasn’t rolled over…
Instead, it’s digesting the move and building a base.
The stock is Dow Inc. (NYSE: DOW), one of the world’s leading materials science companies with $40 billion of sales in 2025.
On the chart below, you can see its spike past the 52-week highs from March 2025.
Here’s the recent intraday price action:
It traded near $50 per share as recently as 2024. And now it has a catalyst to help reclaim that territory.
This is a technically sound setup with a macro catalyst that’s still accelerating…
The Trade
Most people know Dow as a chemical company.
What’s less obvious is its deep exposure to the global fertilizer market, and how that exposure directly ties to everything happening in the Middle East right now.
Including the stock’s recent volatility…
On March 13, the price broke to new highs, held the breakout, and is now sitting at a technical inflection point with a path back toward 2024 levels.
I’m looking at $37.50 calls, expiring April 17, 2026, with a price target near $42.
That’s the trade alert I sent out on March 16 during premarket hours.
A month-long expiration gives this setup enough time to play out without rushing it… I’m likely holding this position into April.
If the thesis breaks down, I know exactly where I’m wrong and what I’m losing: the breakout level was around $35. That can act as my stop loss.
One important note: this is still a wartime trade at its core.
News can change everything overnight. A ceasefire, a diplomatic shift, a de-escalation headline, any of those examples could flip the macro backdrop in a heartbeat.
Keep an eye on the news and manage your position accordingly…
This macro tailwind has already pushed oil to new highs. And now, DOW is ready to follow.
Stay Street Smart,
Jeff Zananiri
*Past performance does not indicate future results, Not typical.
