Precipice of an epic rallyDespite the recent pull back - mitigated by today's rebound - I am more optimistic than I was 10 days ago when my oil portfolio (I may was well just say portfolio) was at its all time high. How a stock or sector performs in the face of bad news as oppose to good news is much more informative for medium to long term trends.
All oil investors should rejoice that oil stocks only corrected (prior to today's rally) by about 10% despite a major 20% drop in oil prices that slid thru several technical barriers. There was no irrational panic selling and many investors wisely took the opportunity to enter the sector or add to their current positions.
In light of recent encouraging news, the prospects for $100+ oil next year is appearing far more likely as the Omicron variant threat fizzles, or maybe even turns into a positive by doing what vaccines were not able to do -i.e. achieve global herd immunitiy.
In my mind it is not whether the rally continues into '22, but will the next rally be as impressive as what occurred in '21 where returns were 100%+. Right now I am 50/50 whether that will occur, meaning that by YE '22 I believe there is a good chance CPG could be trading between $12 and $15. 2 weeks ago, when oil was +$80, my upside forecast for CPG was only $8-10.