So why do they violate the first rule of public pronouncements, namely if you give a price, don't never ever give a date.
(I violate the rule on a regular basis but that's a different story)
From Barron's Getting Technical column:
Goldman Expects Oil Rally; Sees Prices Popping Soon
Sentiment is at negative extremes, the bank’s derivative strategists say, a contrarian buy signal.
Ever since oil started its multi-year free fall, investors have been predicting a turnaround. But the knife kept on falling, below $60, $40, and most recently $30. One year ago,Barron’s wrote that oil could fall to $20.
Now Goldman Sachs, arguably the world’s most influential bank, is telling clients to bet that oil rallies higher by March.
The recommendation may seem incredible as oil prices orbit around $28 to $30 and fears of deflationary pressures sweep global markets. Yet, Goldman is advising clients to buy March $58 calls on the Energy Select Sector SPDR ETF (ticker: XLE ).
The exchange-traded fund was recently around $54, and the March calls were recently around $1.98. The price of the options has moved higher since Goldman’s call, but still have significant upside. If XLE is at $62 by expiration, the calls are worth $4. If XLE doesn’t rise above $58 by expiration, the trade is a failure.
This contrarian trade, which anticipates a pop higher rather than the start of a long, sustained advance, attempts to monetize extremely pessimistic investor sentiment, and derivative pricing levels. Both indicate that investors think oil prices will fall to even lower prices.The implied volatility of three-month options on West Texas Intermediate oil is around five-year highs. XLE implied volatility is around a three-year high....MORE
WTI has continued the collapse with the soon-to-be-gone February's down over 3% ($1.05) at $28.37 and the most-active March's at $29.53 -0.86.
The XLE is at $52.47 Down 1.88 (3.47%) with the mo betta beta XOP at $23.51 Down 1.65 ( 6.54%).
