Iran War Lifted Oil, Gas, And Energy - I'm Not Short Yet

Deep Value Investing11.38K FollowersFollow5ShareSavePlay(16min)Comment(1)SummaryEnergy has outperformed the broader indexes as oil prices have rallied since the start of the year. The rotation out of tech was secondary to the run, in my view.I believe the 2026 energy rally is mostly a geopolitics-driven rerate, not a fundamental shift in the supply/demand prospects.Fundamentals still point to oversupply and softer oil demand. IEA projects supply exceeding demand by 3.73M bpd in 2026, and EIA sees Brent averaging $58 this year.Brent is trading at $78-80 as I'm typing. I'm definitely not chasing the rally on the way up, given that a ceasefire will rerate it back to pre-2026 levels.However, I need to see more irrational exuberance in oil prices before considering a short position in the form of OTM put options. For now, I'm staying on the sidelines. Tatsiana Niamera/iStock via Getty Images As I'm typing, each of the 11 sectors in the S&P 500 (SP500) is down, except one: energy (with industrials barely holding the line lifted by aerospace and defense stocks). In this article, I discussThis article was written byDeep Value Investing11.38K FollowersFollowSmall deep value individual investor, with a modest private investment portfolio, split approx. 50%-50% between shares and call options. I have a B.Sc. in aeronautical engineering and over 6 years of experience as an engineering consultant in the aerospace sector. The latter statement is not relevant in any way whatsoever to my investment style, but I thought to add it for self-indulgent purposes. I have a contrarian investment style, highly risky, and often dealing with illiquid options. How illiquid? Well, you can land a Jumbo on the spread and still have clearance for take-off. From time to time, I buy shares, mostly to not be categorized as a degen by my fellow investor friends, therefore the 50%-50% allocation. My timeframe tends to be between 3-24 months.I like stocks that have experienced a recent sell-off due to non-recurrent events, particularly when insiders are buying shares at the new lower price. This is how I often screen through thousands of stocks, mainly in the US, although I may own shares in banana republics. I use fundamental analysis to check the health of companies that pass through my screening process, their leverage, and then compare their financial ratios with the sector, and industry median and average. I also do professional background checks of each insider who purchased shares after the recent sell-off. I use technical analysis to optimize the entry and exit points of my positions. I mainly use multicolor lines for support and resistance levels on weekly charts. From time to time I draw trend lines, taken for granted, in multicolor patterns. Note: I tried to keep my introduction as real, and authentic as possible. I dislike empty suits, high-level BS, deep-level BS, unnecessary jargon, and self-indulgent, third-person written introductions with an air of superiority.Thanks for reading my introduction!Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Short position through short-selling of the stock, or purchase of put options or similar derivatives in CO1:COM, CL1:COM over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.