Unsubstantiated rumors overnight that Iran fired on U.S. navy warships and heightened concerns over Iran's detention of 15 British sailors have spurred strong buying in oil futures. That's helped drive the price of the May West Texas Intermediate Crude contract through key short-term resistance at $63.75 per barrel, setting the stage for further technical gains in the days ahead.

The obvious play here is to buy oil or oil-related shares. However, weak economic data, including today's lower-than-expected durable goods report for February, suggests that it might make more sense to bet against stocks in the consumer sector. Research I've done points to a strong inverse relationship between energy prices and the performance of consumer-related shares.

One strategy worth considering (for those with the appropriate risk profile): selling short or buying inexpensive, in-the-money put options on the S&P Consumer Staples Select Sector SPDR exchange-traded fund (AMEX: XLP) or the S&P Consumer Discretionary Select Sector SPDR ETF (AMEX: XLY).

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.

Chevron Corp. (NYSE: CVX) opened at $67.28. So far today the stock has hit a low of $66.77 and a high of $67.49. As of 12:50 this afternoon, CVX is trading at 67.05, up 0.62 (0.9%).

After hitting a one year high of 76.20 in December, the stock has lost about 13% over the past three months. Oil futures are rising today after slipping over the last two trading days, giving CVX a boost in early trading. The technical indicators for this stock have been bearish and steady, while S&P gives CVX a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an April bull-put credit spread below the $60 range. CVX hasn't been below 60 since June and has shown support around 68. This trade could be risky if oil takes a dive, but even if CVX retreats, strong historical support around 61 could protect this position, plus the stocks 200 day moving average at 66.75 could also provide support.

Brent Archer is an analyst on the move at Investors Observer. (Free Subscription)

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Oil has been heading towards the $60 level over the past couple of sessions and is trading down again today. Unusually warm weather has created downward pressure on precious crude, which last week was looking as if it was about to head up to the mid $60's to close out the year.

February futures for oil have traded down $0.36 today to $60.74, and oil is trading right at its intra-day low of $60.73.

If oil is not able to hold above $60 we could see prices fall steeply to start off 2007 and head down towards the mid $50's. Warm weather and lack of trust in OPEC's ability to keep its thumb on oil production are, as usual, the major factors weighing on the oil market.

With most of the U.S. experiencing warm weather and the next possible OPEC cuts coming in February at the earliest, there is not a whole lot that could come into the market and push prices higher in the near future. Of course Iran will be playing a major role moving forward as the world continues to pay attention to their nuclear program. This could be a catalyst for some destabilizing geo-political unrest as we start off the new year.