Site icon Tactical Investor

Oil market crashes but oil tanker market raking in profits

 A man, when he wishes, is the master of his fate.
Jose Ferrer

While oil continues to drop, there is one sector connected to the oil market that is doing rather well.  It is the oil tanker sector, and while oil is trading at 11-year lows, many stocks in this sector are already posting double digits gains over the past 12 months.

This sector looks appealing both from the Contrarian and Mass psychology perspective for the following reasons

Take a look at the following chart and it shows that most of the stocks in this sector have performed rather well over the past few months. We purposely included one laggard to illustrate the point that not all stocks are created equal. One should focus on the leaders during the first part of the breakout stage. When the rally is mature, one can divert attention to the laggards as they will eventually catch up the pack.

Factors that bode well for this sector

Game Plan

The sector is not being followed actively, in fact, the crowd is ignoring it, and this is usually the best time for the astute investor to plan an entry. Mass psychology states that you should be happy when the crowd is nervous, and wary when they are happy.  Investing in the energy sector has been an exercise in futility in 2015 for the most part, but there appears to be a bright spot.  We would wait for the oil tanker sector to pullback before committing any new money to this sector.  The current market pullback should provide investors with lovely entry points in some of the top performing stocks in this sector.

 

Let us act on what we have, since we have not what we wish.
Cardinal J. Newman

 

Exit mobile version