Story Highlights
- Right now, the price of gasoline is near where it was at this time last year.
- John’s Chart of the Week predicts prices will climb again by the end of December.
- But he shares a way you can offset paying more at the pump.
My Chart of the Week tells us gas prices are set to rise as much as 27% by the new year.
But I can show you a way to ease the pain by locking in a quick profit on the move.
See, the average price of gasoline in the U.S. this Thanksgiving shouldn’t change much from the previous two years.
Take a look at what’s coming for gas prices. I’ll also explain what it means for the U.S. economy.
As you can see, the price of gasoline is breaking out. This could be the start of a 27% climb over the next six weeks.
Good news: There’s a way to use this analysis to pad your wallet with profits and reduce the pain at the pump.
And traders like us can even turn gasoline’s double-digit rally into a 240% gain!
What to Do When You’re Bullish on Gas Prices
Rising gasoline prices are a sign of inflation. They could coincide with the end of the four-stage U.S. economic growth cycle.
Historically, an economic expansion is ending when rising inflation occurs at the same time as slowing growth.
The pattern marked with two parallel red lines in the chart above is a bullish flag.
It’s a common continuation pattern. That means the price continues out of the pattern the same direction it entered the pattern.
The price of gasoline rose 60% in the first four months of 2019. Now it’s on the rise again.
Gasoline’s price pattern argues for an additional 27% climb in as few as six weeks.
Inflation hasn’t been part of the market conversation for a long time. But if gasoline jumps a bunch by the end of the year, inflation expectations will rise.
Now, rising gas prices alone cannot send the U.S. economy into recession. But a sharp increase could spark new worry about the economy.
When there’s worry, spending more to fill our gas tanks can lead to sacrifices:
- Fewer people buying the latest iPhone.
- Cutting down on eating out.
- Less cash for wardrobe updates.
- Tighter — or nonexistent — vacation budgets.
It can also mean higher costs to businesses and tough decisions for employers signing paychecks. But this is where you can look to make some money.
1 Way to Magnify Your Gains
If you’re looking for a way to ease the pain at the pump, you can hedge yourself with the United States Gasoline Fund (NYSE: UGA).
UGA is an exchange-traded fund (ETF) that tracks the price of gasoline. You can buy units of this ETF in your brokerage account the same way you buy shares of a stock.
If you do, and if you’re paying more to fill up at the gas station, you’ll be making money from the corresponding climb in UGA.
But you don’t have to stop there…
The late stage of the economic cycle is good for more than just gasoline prices.
You see, when inflation perks up natural resource prices, energy and materials stocks tend to outperform the market.
And Matt Badiali and I developed a trading service called Apex Profit Alert. It focuses on these resource stocks.
Our service generates trades in uptrends and downtrends. And it uses a “profit accelerator” to magnify the gains on shorter-term trends.
Click here to see how you can join the service and start magnifying your gains!
Have a happy and blessed Thanksgiving!
Good investing,
John Ross
Editor, Apex Profit Alert