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$100 Oil?

Don’t look now — oil is streaking to new 2019 highs early this morning.

Without much fanfare, a barrel of light crude has jumped more than 2% to kick off the new trading week, climbing above $65 for the first time since early November. Last week’s small push marked crude’s seventh-straight weekly gains, according to Dow Jones Market Data, marking its longest winning streak since 2014.

Rumors of an imminent crackdown on countries that import oil from Iran helped juice today’s move. According to a report from the Washington Post late Sunday night, U.S. officials will end waivers granted to some of Iran’s biggest oil buyers, including China, India, and Turkey. These gas guzzlers will face sanctions if they can’t get their oil fix elsewhere.

“This does bring a lot more uncertainty in terms of global supplies,” Petromatrix analyst Olivier Jakob told Reuters. “It is a bullish surprise for the market.”

While the news is certainly boosting oil’s price this morning, it’s important to note crude has marched steadily higher lockstep with the stock market since it bottomed in late December.

Crude’s final push lower coincided with the market’s Christmas Eve swoon, when a barrel of the black stuff bottomed out near $42, culminating a 45% slide from its October highs.

How quickly things change…

WTIC

Factoring this this morning’s rally, a barrel of light crude is now up 55% from its December lows.

The Iran story continues to develop early this morning. In fact, this just popped up on my feed as I was about to publish:

zerohedge

Is this the spark that will send oil back into the triple digits?

This story ain’t over yet…

As the red-hot oil comeback hits its stride, semiconductors have officially regained their leadership role.

Last month, we jumped onboard the VanEck Vectors Semiconductor ETF (NYSE:SMH). After a few volatile weeks, the big semiconductor ETF has now officially left the correction in the dust.

Our thesis was simple: Following a quick pullback to retest its February highs, SMH looked poised to retake its leadership role. We took advantage of a quick retreat to grab shares, which turned into the perfect entry point for a trade.

Following last week’s strong performance, SMH is now perched at new all-time highs. The fourth-quarter semiconductor meltdown is now nothing but a distant memory.

SMH

The news cycle hadn’t turned bullish for semiconductors just yet. But that could change as earnings season kicks into gear. Chip-making giant and Dow component Intel Corp. (NASDAQ:INTC) is set to report Thursday after the close. A strong showing could help extend this breakout move. I’ll also be watching reaction from NVIDIA Corp. (NASDAQ:NVDA), which doesn’t report until next month. A little pre-earnings rally would be a great way to end the month…

Finally, we need to take the pulse of an ugly earnings loser.

When we first hopped onboard Check Point Software Technologies (NASDAQ:CHKP), the stock was blasting to new all-time highs while the rest of the market was barely taking a bite out of the fourth-quarter correction.

CHKP was riding a wave of momentum in the cybersecurity and software industries, many which were posting some of the prettiest charts on the market.

The company’s latest earnings report has halted its strong rally. Check Point topped first-quarter profit expectations. But beating its bottom-line number wasn’t good enough for investors. Revenue growth of just 4% didn’t wow Wall Street and the stock took a beating to close out the trading week.

But all is not lost. After dropping double-digits Thursday morning, buyers stepped in to help close the stock right near our February entry point. CHKP finished the day down less than 8%, setting the stage for a bigger bounce if the $120 area continues to act as key support.

CHKP

I’ll keep a close eye on CHKP and some of our other short-term trades that were caught in last week’s momentum reset. As of this morning, the market’s not forcing us to sell any of these plays just yet.

Sincerely,

Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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