Everyone is watching oil.
Including me…
But my trade strategy goes against the narrative.
The war with Iran has turned energy into the most emotional sector in the market.
Trump posts on Truth Social about “great progress” in peace talks. Then, an hour later, he’s threatening to bomb Iranian power plants and desalination infrastructure as Iran contradicts him entirely.
The price of oil can swing both ways before lunch.
And that kind of volatility draws traders like moths to a flame.
Every morning, media feeds are flooded with oil plays, energy stocks, defense tickers, WTI futures… anything that moves on a geopolitical tweet.
Meanwhile, something else is developing in the background. Something that most traders are too distracted to notice.
This oil momentum won’t last forever. And when the turn comes, I plan to bank on the volatile shift.
I’m not following the crowd into oil…
Momentum Has a Ceiling
Let’s be clear about something: I’m not anti-oil.
There’s real money to be made in the energy sector during this war.
But there’s a difference between trading a trend and chasing a bubble.
Look at what happened earlier this year. The iShares Silver Trust (NYSE: SLV) spiked hard due to geopolitical and economic fears.
Traders piled in, convinced the momentum was unbreakable.
Then it collapsed. It was a historic pullback that wiped out everyone late to the party.
That’s what happens when a stock runs out of fuel.
Right now, I’m watching a major energy name that’s developing the same pattern as SLV.
And I’m not buying the hype.
The Setup
Last Friday, I started looking for Put entries on Exxon Mobil Corporation (NYSE: XOM).
XOM has been carried higher by the same Iran war narrative that’s driving the entire energy complex.
Every escalation gives it a bump, every peace rumor pulls it back.
On Monday, March 30, the price spiked higher after more updates from the Middle East:
Trump claimed “great progress” in Iran talks on Truth Social, but then threatened to bomb Iranian power plants if a deal wasn’t reached. Meanwhile, Iran denied agreeing to anything and called the President’s plan “unrealistic”.
But despite increased tensions, the XOM chart is starting to look over-extended. The same kind of overextension we saw in SLV before its historic pullback earlier this year.
The stock hasn’t priced in:
- A world where the war de-escalates
- Or where peace talks actually go somewhere
- Or where the global economy’s damage from energy supply disruption starts pulling demand lower instead of pushing prices higher…
Those scenarios could hit XOM any day.
The Iran war has created an artificial floor under oil prices. Every trader knows this. Every institutional desk knows this. And the question isn’t whether the floor is real…
But how long will it hold?
Peace talks are happening, even if they’re chaotic. Trump has backed down from his bombing threats repeatedly. And Iran is negotiating, even while publicly pushing back.
The global economy is screaming for relief. And at some point, this pressure will break the other way.
When oil sells off, XOM is going to get smoked. Energy stocks don’t hold up when the commodity underneath them collapses.
Be patient. The shift is coming.
Stay Street Smart,
Jeff Zananiri
*Past performance does not indicate future results, Not typical.
