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Trading Oil Stocks

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Trading Oil Stocks

In trading oil stocks and trading oil futures traders have been keeping tabs on the violence in Libya. Using technical analysis with Candlestick stock charts they gauge evolving stock market and commodity market sentiment. Fundamental analysis of this situation is fairly basic. Political unrest in the North African oil producer threatens the production, refining, and export of crude oil and its products. For Shell and Exxon-Mobile, who have recently reentered Libya, one might expect the Libyan unrest to be a threat to production but for other producers outside of Libya a rise in oil prices due to Libyan problems could be profitable, at least in the short term. As in all such situations the news drives the prices of stocks and futures. However, the fundamentals are typically discounted very quickly. As such it is through the use of Candlestick analysis that stock traders can anticipate the next movement in stock prices and profit accordingly in trading oil stocks.

Commodity traders as well as stock traders will likely view the Libyan situation as a temporary trading opportunity in trading oil stocks as well as oil futures. Like the recent unrest in Egypt the mass demonstrations may well be resolved peacefully and may have no effect upon oil production and export. As such, stock market investors may profit from short selling when prices have been driven up by the news, if indeed they are correct in thier believe that prices of oil and oil stocks will settle down again. For trading in companies doing business in Libya, whose stocks may be depressed by this situation, it may present an opportunity for buying at the bottom of a news-driven dip in stock prices. Again, the fundamentals tend to be discounted by the market quite rapidly so the best bet for profits tends to be to watch the market with Candlestick pattern formations. The investor can use Candlestick trading tactics to garner short term profits from this unstable situation in trading oil stocks due to the situation in North Africa.

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Trading Oil Stocks

  1. 1. By www.CandleStickForums.com
  2. 2. www.CandleStickForums.com In trading oil stocks and trading oil futures traders have been keeping tabs on the violence in Libya.
  3. 3. www.CandleStickForums.com Using technical analysis with Candlestick stock charts they gauge evolving stock market and commodity market sentiment.
  4. 4. www.CandleStickForums.com Fundamental analysis of this situation is fairly basic.
  5. 5. www.CandleStickForums.com Political unrest in the North African oil producer threatens the production, refining, and export of crude oil and its products.
  6. 6. www.CandleStickForums.com For Shell and Exxon-Mobile, who have recently reentered Libya, one might expect the Libyan unrest to be a threat to production but for other producers outside of Libya a rise in oil prices due to Libyan problems could be profitable, at least in the short term.
  7. 7. www.CandleStickForums.com As in all such situations the news drives the prices of stocks and futures.
  8. 8. www.CandleStickForums.com However, the fundamentals are typically discounted very quickly.
  9. 9. www.CandleStickForums.com As such it is through the use of Candlestick analysis that stock traders can anticipate the next movement in stock prices and profit accordingly in trading oil stocks.
  10. 10. www.CandleStickForums.com Commodity traders as well as stock traders will likely view the Libyan situation as a temporary trading opportunity in trading oil stocks as well as oil futures.
  11. 11. www.CandleStickForums.com Like the recent unrest in Egypt the mass demonstrations may well be resolved peacefully and may have no effect upon oil production and export.
  12. 12. www.CandleStickForums.com As such, stock market investors may profit from short selling when prices have been driven up by the news, if indeed they are correct in their believe that prices of oil and oil stocks will settle down again.
  13. 13. www.CandleStickForums.com For trading in companies doing business in Libya, whose stocks may be depressed by this situation, it may present an opportunity for buying at the bottom of a news-driven dip in stock prices.
  14. 14. www.CandleStickForums.com Again, the fundamentals tend to be discounted by the market quite rapidly so the best bet for profits tends to be to watch the market with Candlestick pattern formations.
  15. 15. www.CandleStickForums.com The investor can use Candlestick trading tactics to garner short term profits from this unstable situation in trading oil stocks due to the situation in North Africa.
  16. 16. www.CandleStickForums.com The flip side of trading oil stocks in this situation is trading stocks that are affected by high oil prices.
  17. 17. www.CandleStickForums.com As oil prices jumped six percent on the news from Libya, stocks fell and continued to decline even as oil prices pulled back a little.
  18. 18. www.CandleStickForums.com As usual long term investing is threatened by events that threaten the economy over the long term.
  19. 19. www.CandleStickForums.com Day trading, on the other hand, can be profitable in both the ups and downs of the economy.
  20. 20. www.CandleStickForums.com Here we get back to the advisability of using technical analysis tools such as Candlestick patterns to read market sentiment as events such as the Libyan situation unfold.
  21. 21. www.CandleStickForums.com In trading stocks or futures in unstable situations such as that in Libya options trading can be useful.
  22. 22. www.CandleStickForums.com In trading options and buying calls or buying puts on a stock or on a futures contract the trader essentially buys a little insurance with his premium.
  23. 23. www.CandleStickForums.com If he expects the price of a stock to go up he will buy calls on the stock and if he expects it to fall he will buy puts.
  24. 24. www.CandleStickForums.com In either case he will profit in trading oil stocks or other stocks with options if the price moves as expected and will only sustain the loss of the premium paid if the price moves contrary to his expectations.

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