Did You Anticipate Gasoline Futures 2-Week 12% Rise?
by Mike Paulenoff
February 21, 2021 • 11:14 AM EST
Back on February 3, Mike Paulenoff highlighted the potential for a continued rise in gasoline futures.
He told MPTrader members: "Could it be that gasoline is in the eye of a perfect storm? A post-covid, accelerating US economy, a consumer flush with cash ready to jump into the car to spend in restaurants (hopefully) and travel, an Administration looking to reimpose harsh regulations on drilling, fracking, and refining, which reduces supply in an economy that will depend on fossil fuel for years to come. And if this 'Perfect Storm' progresses, won't it be inflationary, or at the least, raise inflationary expectations?"
During the subsequent two weeks, RBOB climbed relentlessly to its Feb 18 multi-year high at 1.85 (see our chart), up 12% from Mike's Feb 3 update.
This contributed to propelling the overall energy sector higher, with the XLE (S&P Select Energy SPDR ETF) up 17% and OXY (Occidental Petroleum) up 29%, two components of Energy that Mike monitors and updates frequently for members in his MPTrader Coverage List.
What's next for gasoline now that it has hurdled a resistance line that originated in October 2018 near $2.00/gallon? Will it impact the CPI, consumer behavior, and the underlying energy sector components?
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More Top Calls From Mike
This past Tuesday afternoon (Feb 9), one of our long term subscribers, Sid_F, asked Mike in his MPTrader discussion room what he makes of QS (QuantumScape Corp), which develops and commercializes lithium-metal batteries for Electric Vehicles.
Mike responded: "Sid, QS looks to me like it ended a major correction from its high at $132.73 (12/22/20) into its $40.62 low (2/01/21), and for the last week or so, has been carving out a potential bottom ahead of lift-off into a powerful rally phase.
Back on November 23, Mike Paulenoff alerted MPTrader members to a long opportunity in Occidental Petroleum Corp. (OXY).
OXY, he explained, stood to benefit from the Biden Administration's "much less friendly" view of fossil fuels than its predecessor, which could result in reduced output amid increasing demand, thus lifting the price of crude oil.
Plus, technically he saw the stock in a developing multi-month base formation, and emerging from a significant double-bottom low.
This past Monday, after Vaxart, Inc. (VXRT) popped above key technical resistance, Mike Paulenoff posted a timely update alerting MPTrader members to a potentially significant upside breakout:
"VXRT has again climbed into heavy, but very consequential resistance from 8.30 to 9.45," Mike wrote. "If VXRT can chew through the resistance zone, it will be poised for upside continuation that projects 14-15 in a 'normal' market.
On Thursday of this past week, Mike Paulenoff alerted MPTrader members of a long set-up in CRM (salesforce.com), writing:
"After making yet another new multi-month corrective low at 212.98 last Friday, CRM has turned up and has climbed above initial resistance at 219.50-220.00, which triggered an initial 'long alert' in my work."
Mike added: "My work argues that CRM has turned up, and has triggered a preliminary buy signal.
Last Wednesday afternoon (Jan 13), with the IWM at 210.76, Mike Paulenoff told MPTrader members:
"The Russell 2000 Small Cap ETF is just about 0.5% off of its all time high. As long as any weakness is contained above 204.30, my near-term pattern set up from the 1/04 pullback low at 190.94 is poised for still higher ATHs above 211.73."
The IWM reached a high of 215 the very next day.
