Oil entered a steep downturn in August...
The commodity fell 16% from its July peak through August 20. Prices declined for seven straight days.
But then, the fall stopped. Prices turned around... And oil began to soar.
The commodity is now up nearly 30% from that low. And it broke above $80 a barrel for the first time since 2014.
Yes – oil went from a near-bear market to seven-year highs in just a couple of months. And according to history, these new highs could lead to even more gains in oil over the next year.
Let me explain...
Nobody wants to buy at the peak of a rally. That's why buying an asset after it has gone up seems counterintuitive...
The gains have already been made, right? Haven't you already missed it?
Actually, history shows that fear of buying at the top can do you more harm than good. The truth is that buying into a strong uptrend works.
Oil hitting multiyear highs is a great example of this principle in action. If you're scared to buy because the commodity has already gone up, you'll likely miss out on double-digit gains.
For three decades, we've seen this play out... buying when oil hits new highs has led to even higher highs a year later 71% of the time. And we're coming off a multiyear high right now. Check it out...
You can see the quick snap back from August's bottom. It has essentially been a one-way ride higher. And oil broke out to a seven-year high along the way.
This breakout will likely lead to more gains in the commodity over the next 12 months. And double-digit returns are possible. Take a look...
Since 1990, oil has risen 3.3% per year. But buying after new highs is much more lucrative for investors...
Similar cases have led to 8% gains in six months and a 10% return over the next year. That's much better than a typical buy-and-hold strategy. And it's not what most investors would expect after the recent rally.
In short, if you see today's breakout as a sign you've missed out, history shows that you should reconsider. There's still time to make money in this commodity... A double-digit gain in oil is likely from here.
Good investing,
Chris Igou
Further Reading
"If you catch these breakouts in real time, they can lead to big outperformance," Chris says. One group of stocks just flashed a major signal for big upside potential in the future. It's an area of the market you might just be ignoring... Read more here.
After being decimated by the pandemic, this industry is coming back to life. And with demand for its services soaring right now, you can expect that trend to continue... Get the full story here: This Left-for-Dead Sector Is Hitting Its Stride.
With oil prices likely heading higher, you'll want to own companies that profit as prices rise. And this up-and-coming energy company is a great opportunity today...
DEMAND FOR 'CLOUD' SERVICES IS HEATING UP
Today's company is benefiting from a game-changing trend...
DailyWealth readers know we love companies that take part in big, secular trends... like the rise of the "cloud" over the past few years. The cloud allows folks to access data and software over the Internet, instead of storing them on your computer. And today's company is thriving as demand for cloud services increases...
Oracle (ORCL) is a $260 billion cloud giant. It offers a broad suite of applications. And its software has uses in all kinds of industries – everything from health care to entertainment to manufacturing and more. That puts its services in high demand... In the most recent quarter, Oracle racked up $9.7 billion in sales, up 4% year over year. And it reported that its two new cloud services are its fastest-growing and highest-margin businesses... making up more than 25% of quarterly revenues.
As you can see, ORCL shares have been in a solid uptrend over the past two years. They're up roughly 75%, and recently hit a fresh all-time high. And as the world increasingly relies on the cloud, we can expect this trend to continue...
