Naked Chart Trading: Crude Oil & MY O&G 15 Apr 2024

Well, today sharing gonna be longer than usual. I want to identify the relationship between geopolitical tension, international crude oil prices and Malaysia oil & gas stocks: Are they correlated?

I will analyse from $Crude Oil Futures(JUN4)(CLmain.US)$ WTI chart, zoom into Malaysia oil & gas sector $Oil & Gas(BK9052.MY)$ , then further into individual oil & gas stock like $YINSON(7293.MY)$

Background
Heightened geopolitical tension between Israel and Iran had sent WTI prices to its highest since Oct 2023 but I see this as a short term catalyst, unless the situation goes worse. Otherwise, oil prices should back to its fundamentals like OPEC production cut decision, US crude oil inventories, world oil demand etc.

Market seem to be digested from geopolitical tension as WTI oil prices stabilize around USD 80 per barrel.

$Crude Oil Futures(JUN4)(CLmain.US)$ Daily Chart

WTI entered wide range since 2023 and I drawed a Fibo retracement from May 2023 low to Sep 2023 high, the most recent bull wave. WTI marked its bottom again in Dec 2023 and testing for another bull wave this year, with immediate resistance at USD 88 which is also 23.6% Fibo level, while immediate support at around USD 84. Any close below USD 84 may trigger technical correction to 38.2% USD 83 and 50% USD 79 level

$Oil & Gas(BK9052.MY)$ Daily Chart

Back to Malaysia O&G sector, which shared a similar trend with WTI as well, but in stronger bull trend. Based on Fibo retracement and extension, the index currently testing 138.2% and the waves are still healthy with higher highs and lows. immediate resistance at around 1220 to signal another bull wave, while immediate support at around 1190, which will lead to a technical correction

$YINSON(7293.MY)$ Daily Chart
I choose YINSON because of it being as the Top 3 component stock by market cap in the O&G sector index above and its PE is attractive. Anyway this is just an example I picked to illustrate how geopolitical conflicts affect oil prices and indirectly affect Malaysia O&G stock prices, no buy/sell recomendation here.

Unlike $DIALOG(7277.MY)$, $HIBISCS(5199.MY)$ or $ARMADA(5210.MY)$ which share prices already spiked since this year, YINSON is still remain at sideway to lower trend, in a trading range of RM2.20-RM2.80. In fact, YINSON had been trading in range since Covid.

I drawed a Fibo retracement from Jul 2022 low to Feb 2023 high, the price had been tesing 50% to 61.8% Fibo level around RM2.20-RM2.30, with strong support at around RM1.80-RM1.90. Resistance will be see at around RM2.80, close above to have a chance to retest RM3 level.

There is no higher high and low wave for now and oil prices may enter a technical correction. Got to closely monitor oil prices and its trend again to see if YINSON is potential to be the next O&G stock mover.

Disclaimer
This content is for reference only and does not constitute any investment advice, and past performance is not indicative of future performance. Returns will vary, and all investments carry risks, including loss of principal. Please make your own investment decisions.