The crash in oil prices has hurt many oil companies.
Last year we warned our LeadingTrader subscribers that many oil companies will struggle to remain profitable and they will eventually face bankruptcy.
In April 2015 I made a video on the “Worst Oil Stock in the World” and I recommended our traders to short (bet against) Whiting Petroleum (WLL) if the price were to go below $30.
Take a look at what has happened to Whiting since then:
Our LeadingTrader subscribers are in significant profit in this short trade as Whiting Petroleum fell from $30 to nearly $4 in less than a year. That is a 85% drop in this stock!
My downside target for Whiting at the time was $10 – and we can see that it has fallen much further lower. Still, traders who took some profits at $10 and then trailed their stops lower did very well.
Whiting is just one of the stocks that is facing huge financial difficulties due to the fall in oil prices. There are others…
For example, Chesapeake Energy (CHK) is another stock that has seen a dramatic fall in its share price:
Rumours that Chesapeake Energy could face bankruptcy panicked investors into selling this stock. We can see CHK falling from $16 to $2 – an 88% drop – since this time last year!
By the way, we are NOT recommending any of our readers to suddenly start shorting or buying these stocks at present. Not at all.
The risk right now of huge volatility affecting these stocks is too great.
And besides, shorting stocks which have fallen into low single digits is never a good idea, due to liquidity risks. Also remember the phrase “buy low and sell high”? Well, you sell HIGH, NOT sell low.
By the way, currently there is another high quality oil stock which is trading at nearly one dollar… yes only a dollar!
This stock is in significant risk of either falling further and becoming bankrupt… OR becoming a phenomenally great stock that could rise in triple digits! It is what we call a “make or break” oil stock.
I reveal what this oil stock is in in our premium video on Friday. Make sure you don’t miss it. To join our premium analysis click here.