The Contrarian Oil Trade Everyone's been bullish oil on Iran tensions. Strikes seemed imminent. Risk premium was baked in. The Reality: RSI topped 70... and MFI over 80... Both were OVERBOUGHT. What Happened: OILU spiked to $34 on Iran fears US-Iran talks now scheduled for Turkey this week Price crashed -6.93% to $30.50 today Geopolitical risk premium evaporating When everyone is bullish on a narrative (Iran strike!), check your indicators. RSI approaching 70, MFI approaching 80 = overbought. Small position, larger payoff. Fade the narrative when indicators flash overbought. You don't need to catch the exact top. A small short position with defined risk can pay off big when the narrative unwinds like it did today. Indicators > Headlines.
Published Feb 02, 2026Updated Feb 02, 20262 min read
The Contrarian Oil Trade Everyone's been bullish oil on Iran tensions. Strikes seemed imminent. Risk premium was baked in. The Reality: RSI topped 70... and MFI over 80... Both were OVERBOUGHT. What Happened: OILU spiked to $34 on Iran fears US-Iran talks now scheduled for Turkey this week Price crashed -6.93% to $30.50 today Geopolitical risk premium evaporating When everyone is bullish on a narrative (Iran strike!), check your indicators. RSI approaching 70, MFI approaching 80 = overbought. Small position, larger payoff. Fade the narrative when indicators flash overbought. You don't need to catch the exact top. A small short position with defined risk can pay off big when the narrative unwinds like it did today. Indicators > Headlines.
