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Blowout: Experts Talk Oil Moves On PreMarket Prep After Saudi Attack

Joel Elconin

With crude oil futures posting their single largest daily up move ever, oil and oil-related stocks were the main topics Monday on Benzinga's PreMarket Prep show. 

To begin with, almost all of the stocks in the oil patch were showing substantial gains in premarket trading.  This move came on the heels of impressive rallies over the last few weeks.

Investors were encouraged not to chase the up move in these issues and to focus on the premarket highs for continued follow-through — and to identify any daily highs from the past that may come into play. 

Other issues that benefited from the weekend attack on the Aramco facility in Saudi Arabia were defense stocks. With international turmoil rearing its ugly head, investors were buying these issues aggressively in premarket trading.  

This move is a continuation of a yearlong rally in the defense sector.

GM Hit Twice 

Issues under pressure from serious threat of much higher oil prices were discussed on PreMarket Prep, including airline stocks, cruise line stocks and automotive stocks.  

General Motors Company (NYSE: GM) was hit with a double dose of bad news, as the UAW declared  a strike against the automaker for the first time since 2007.

Both the airline and cruise lines had shown signs of life as of late, and it was emphasized that investors may view the pullback in these sectors as a buying opportunity if the rally in oil does not continue and/or more facilities do not come under attack.

The guests on Monday's show were Ryan Craver of Commerce Canal, a top retail analyst who surveyed the winners and losers from the retail earnings season.  

Twitter’s go-to oil expert Tracy Shuchart emphasized a “wait-and-see” approach for follow-through in the oil rally.

A Tuesday Preview 

Be sure to tune-in to Tuesday’s show, when Monday’s action will be reviewed and the catalysts for the upcoming trading session will be identified.

At 8:35 a.m. EST, Barron's columnist Steven Sears will join the crew and review a few of his most recent options trades. 

Listen to Monday's full discussion on oil beginning at 01:19 in the recording below.

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET here. The replay can be found on Benzinga's YouTube channel, and the podcast is on iTunes, Google Play, Soundcloud, Stitcher and Tunein.

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