Sharpfokus predicts oil to $65...
August 21st, 2020
⏰ 1 minute read
⏰ 1 minute read
Will oil break up or down... we think ⬆️
Breakout?
A few months ago the oil price was negative. Some thought it would go even lower. But now the price is back at $40. For just under 3 months the price volatility has been getting smaller & smaller. When volatility shrinks to zero, it means a big move is coming. We think it’s a jump up to $65. Here’s why.
XOM
One of the US stocks we cover is Exxon (XOM). It is the best performer out of the stocks which have been listed for 100 years. But it’s been eclipsed by the tech stocks & recent performance has been terrible. Cashflow is negative, profit has turned to loss & the shares have collapsed. It’s all because of the oil price.
Price
Apart from the brief & extraordinary fall to negative, the oil price has followed a very similar pattern to 2015/16. In late 2015 & into 2016 the oil price fell below $40 down towards $35. After that the price recovered to over $70 by the middle of 2018, before then falling back to $30 (& briefly below) again this year.
Investment
In our Sharpfokus Saham research, we follow the cashflow closely & investment cashflow of XOM has not surprisingly closely matched with the oil price. Back in late 2015, they were spending $6.5bn per quarter. Then spending fell back to $2.7bn into 2018 matching higher prices. Spending then increased again to $6.5bn last year. 2Q spending was down sharply to $5bn.
$65
The sharp slowdown in XOM investment spending is a leading indicator & already implies that the oil price will break out higher. In our forecasts we predict that investment spending will fall further to $3.2bn in the next few quarters. That implies the oil price will rise much further towards $65. Lets see if our Sharpfokus Saham prediction comes true.
A few months ago the oil price was negative. Some thought it would go even lower. But now the price is back at $40. For just under 3 months the price volatility has been getting smaller & smaller. When volatility shrinks to zero, it means a big move is coming. We think it’s a jump up to $65. Here’s why.
XOM
One of the US stocks we cover is Exxon (XOM). It is the best performer out of the stocks which have been listed for 100 years. But it’s been eclipsed by the tech stocks & recent performance has been terrible. Cashflow is negative, profit has turned to loss & the shares have collapsed. It’s all because of the oil price.
Price
Apart from the brief & extraordinary fall to negative, the oil price has followed a very similar pattern to 2015/16. In late 2015 & into 2016 the oil price fell below $40 down towards $35. After that the price recovered to over $70 by the middle of 2018, before then falling back to $30 (& briefly below) again this year.
Investment
In our Sharpfokus Saham research, we follow the cashflow closely & investment cashflow of XOM has not surprisingly closely matched with the oil price. Back in late 2015, they were spending $6.5bn per quarter. Then spending fell back to $2.7bn into 2018 matching higher prices. Spending then increased again to $6.5bn last year. 2Q spending was down sharply to $5bn.
$65
The sharp slowdown in XOM investment spending is a leading indicator & already implies that the oil price will break out higher. In our forecasts we predict that investment spending will fall further to $3.2bn in the next few quarters. That implies the oil price will rise much further towards $65. Lets see if our Sharpfokus Saham prediction comes true.
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