Sky Quarry Inc. (NASDAQ:SKYQ) shares are trading lower during Tuesday's pre-market session. The pullback follows a Monday rally where the stock surged over 37% amid global energy supply fears.

Easing Geopolitical Tensions

The downward pressure comes as diplomatic outlooks shift. On Monday, Vice President JD Vance hinted at a potential path forward regarding stalled talks with Iran.

Vance stated a diplomatic breakthrough is within reach if Tehran meets U.S. "red lines." He added such an agreement could be "a very, very good deal for both countries."

Cooling Oil Prices

Energy markets are reacting to these headlines. After Brent crude surpassed $100 per barrel on Monday, crude oil futures dropped 2.37% early Tuesday to approximately $96.73.

This reversal impacts domestic energy players like Sky Quarry, which gained momentum yesterday on the back of rising fuel costs and its Nevada-based Foreland Refinery operations.

While Sky Quarry retreats, the broader SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust (NASDAQ:QQQ) are trading higher.

Outlook on Energy

Professor Jeremy Siegel recently warned that the stock market remains sensitive to the ongoing energy shock.

He noted that unless there is a "meaningful de-escalation," markets may remain rangebound.

Technical Analysis

Sky Quarry is still holding a strong uptrend on longer-term charts, sitting well above its major moving averages and closer to the middle of its 52-week range than the April peak.

The stock is trading 146.8% above its 20-day simple moving average (SMA) and 249.1% above its 100-day SMA.

The relative strength index (RSI), a momentum gauge, is 80.84.

  • Key Resistance: $19.50
  • Key Support: $4.50

Price Action: Sky Quarry common stock was down 3.36% at $11.23 in Tuesday's pre-market, according to Benzinga Pro data.

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