The world has finally awakened to the looming climate change catastrophe and is suddenly rushing its way towards renewables. New oil and gas exploration projects are hardly being approved, while the world is still heavily-dependent on fossil fuels. This threatens to create a huge supply-demand imbalance, which can result (already results?) in much higher energy prices.
For better or worse, one of the consequences will be higher profits for the companies in the sector. The stock of Hess Corporation, and oil and gas exploration and production business, seems poised to rise in the long-term already. Take a look at its Elliott Wave chart below.
Between 2008 and 2020, Hess Corp. stock fell from $137 to as low as $26 a share. This 81% decline corresponded to the crude oil bear market, which culminated in the spring of 2020 when prices went into negative territory for the first time ever.
Bulls Seem Eager to Lift Hess Stock in Coming Years
From an Elliott Wave standpoint, the important thing is that Hess’ 2008-2020 bear market looks like a simple (A)-(B)-(C) zigzag correction, where wave (B) is a triangle. According to the theory, once a correction is over, the preceding trend resumes.
And indeed, as the world economy began to reopen in the second half of 2020, energy was suddenly in short supply. The price of WTI crude oil climbed to $85 a barrel and Hess stock climbed with it. By October 2021, the stock was already approaching $93 a share, up nearly 260% from its 2020 bottom.
Furthermore, this surge is shaped as a five-wave impulse pattern, labeled 1-2-3-4-5. Impulses point in the direction of the larger trend, so once wave (2) is over, it would make sense to expect more long-term upside. Eventually, a new all-time high is there for the taking for Hess Corp. investors.
Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!