Imperial Oil (IMOShare Price Jumps 1207% as Crude Oil Hits 5-Year Highs
This week’s stock analysis is Imperial Oil ($IMO). The company’s share price has skyrocketed by a staggering 1,207% since its April 2020 low, making it one of the most impressive performers in the market. The rally in crude oil prices has been a significant catalyst for this surge, with Brent crude hitting $125 per barrel and WTI crude reaching $115 per barrel.
The current economic climate is tense due to the largest inflationary pressures in 40 years, and crude oil testing its 7-year highs simultaneously. However, ironically, profits for electronic vehicles and oil companies are both surging. Over the past several years, auto manufacturers have started to strategically position themselves towards electric vehicles and move the production of their fleets away from gas-guzzling autos.
As a result, this has led to a shift in the supply & demand equation in the petroleum complex. The past year’s rally in crude oil prices has been impressive, with prices up 67%. This has led Wall Street analysts to make some very bullish forecasts on crude oil, including J.P. Morgan’s $125 per barrel prediction and Goldman Sachs’ minimum price of $100 per barrel.
Imperial Oil’s Performance
The annual chart of Crude Oil shows a strong upward trend over the past year, with new 52-week highs being made regularly. The longer-term ten-year chart provides context for Imperial Oil’s potential movement based on its historical performance. To analyze IMP we want to see which ETFs are most closely correlated to Crude oil price action and what are their movements.
Over the last year ENERGY SECTOR SPDR had a 93.10% correlation to the price of Crude Oil. This is why our focus on $IMO is strictly based upon its price action being so tightly connected with that of Crude Oil which has been performing well lately.
Understanding the Trend
To understand the current trend, let’s examine Imperial Oil’s chart in conjunction with VantagePoint’s algorithms and neural network indicators. The VantagePoint A.I. forecast (Predictive Blue Line) helps identify the medium-term trend price forecasts for #IMOS. This algorithm is a critical tool that traders rely on to stay informed about market trends.
The Neural Network Indicator, found at the bottom of the chart, predicts future short-term strength and/or weakness in the market. When the neutral net indicator is green it communicates future strength, while a red signal suggests short term weakness. A double confirmation is when both the AI forecast (blue line) and the neural network at the bottom are pointing towards the same direction for entry points.
Intermarket Analysis
To understand the driver of $IMO’s price movement, intermarket analysis can be done to analyze markets that have the greatest impact on the Imperial Oil stock price. Analyzing other market movements will give understanding about the relationship between $IMO and its drivers.
The Intermarket Analysis tool is used by top performing power traders worldwide who are looking for statistically valid trading setups. Understanding $IMO’s intermarket relationships helps with buying, selling, or neutral strategies as $IMO may outperform on upswings.
Our Suggestion
Based on all the analysis we have done so far, we think that the bull market in Crude Oil has a long way to go. With inflation at 40-year highs and supplies meeting increasing demand due to less production during pandemic times now ramping up, our only loyalty is following trends as they are turning upward currently. However, in case prices should drop by more than 10%, it may present buying opportunities.
We suggest adding this stock onto your trading radar to keep an eye on its future price movement as crude oil continues moving upwards. Practice money management carefully with every trade to avoid potential losses and put a stop-loss below dark line in charts provided here.