Oil hit a speed bump late last year, but the tough times might be over...
The commodity fell 23% from its peak in October to its recent low in December. The quick drop was a shake-up in the trend. But that isn't likely to continue in 2022...
After the fall, oil is climbing back quickly. It's up double digits in a little more than a month. And it rallied seven days in a row in mid-December.
That points to even more upside from here. Oil has already broken out to multiyear highs... But another 17% move higher is possible, based on history. And that means we could see $100 oil in 2022.
Let me explain...
Last year was a stellar year for oil. It nearly doubled in value into its October high. And while it had a major sell-off in November, it has stormed back since.
At $87 a barrel, oil is already at a multiyear high. And the recent rally saw the commodity's price climb for seven straight days.
A string of consecutive up-days tells us that the current trend could be accelerating... And that means strong outperformance is likely in the next few months.
That's already playing out in oil. You can see the recent rally in the chart below...
Oil's fall turned on a dime in early December. And that new uptrend is starting to accelerate, according to the numbers.
Since 1990, similar setups have led to winning trades 78% of the time. We could see significant outperformance in oil over the next 12 months as well. Take a look...
Oil has been up roughly 4% per year since the start of 1990. But that slow climb over 30-plus years doesn't mean that the commodity can't soar in short order. We've seen that recently. And another double-digit surge is likely from today's prices...
Previous examples have led to 7% gains in six months and a 17% gain over the next year. That's much bigger than a 4% annual gain.
Today, oil prices are heading back up. The commodity is coming off a recent winning streak. And more upside is likely from here.
If we see a 17% gain from here, oil will soar past $100 a barrel for the first time since 2014. That's something few would have thought possible at the start of 2021. But now it's not just possible, it's likely.
The trend is in place. And that means oil and energy related investments will likely be big winners this year.
Good investing,
Chris Igou
Further Reading
History tells us that buying into the oil sector when it's in an uptrend is a strong bet. And even though it had a hiccup after recent highs, that's exactly what we're expecting in the near future... Read more here: Oil Hits a Seven-Year High... With More Gains to Come.
"Investors love plenty of things right now," Steve writes. "But oil is not one of them." And with the strong uptrend in oil today, this could mean a major boom ahead... Get the full story here: Buying 40,000 Acres in West Texas.
With oil surging, it's a great time to be long on energy stocks. And Eric Wade has found an oil company with big plans and major upside...
FOLKS STILL NEED TO EAT... AND SO DO THEIR ANIMALS
Today's chart highlights an agricultural giant...
Many companies are facing challenges as the COVID-19 pandemic rages on. The Omicron variant has led to more shutdowns and economic uncertainty. But basics like food and water are always going to be in demand. That's why today's company is staying afloat...
Archer-Daniels-Midland (ADM) is a $40 billion food-processing giant. It serves 200 countries worldwide by selling crucial ingredients. Its food-and-beverage portfolio includes essentials such as alcohols, oils, flavors, and grains... Plus, it also helps make livestock feed and more. So this company has plenty of ways to make money on food production. In the third quarter, Archer-Daniels-Midland posted earnings per share of $0.97... up 9% year over year. And its Animal Nutrition segment nearly doubled its profits over that period.
As you can see in today's chart, ADM shares are performing well. They're up more than 60% over the past two years, recently hitting a new all-time high. As people look to nourish themselves and their animals, this company should benefit...
