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Is Crude Oil Heading To $75?

ByChris Kimble
Published 01/03/2017, 12:49 PM
CL
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Could higher crude-oil prices create a positive ripple effect on stocks globally? It's possible. Has higher crude prices always correlated with higher stock prices? No.

Below looks at crude's price pattern over the past 30 years.

Weekly Crude Oil

Crude oil has spent about 90% of the past 30 years inside of rising channel (1). The bottom of this channel was hit 11 months ago, where support held and a strong rally followed.

Over the past six months, crude looks to have created a bullish ascending triangle and is attempting a “dual breakout” of channel and ascending triangle resistance at (3).

A couple of weeks ago, we noted that the measured move in Crude Oil suggested it could reach at least $75 -- a 50% rally from current levels -- due to measured-move calculations.

Strength at (3), would be a good sign for crude oil and energy stocks.

Full Disclosure-Premium Members are long the energy sector.

Latest comments

Investing in FOREX and some commodities such as crude is brutally dependent on the political arena to the extent that many consider looking at the cyclical patterns for support is misleading. While price fluctuations do drive the cylical elements so do wars, sanctions, alliances and elections. From roller-coaster experiences in these markets, I strongly recommend heed in these investments especially for small players working on short and medium term investments.
It will someday, right? In the next year or two, it's more likely to hit $40 before it hits $60, IMO. The world, and particularly the US, can't pump enough of it in the $50-55 range, effectively capping world prices in that slot, and opening up a big opportunity for a grand fall south of $50 and as low as $35-40 at some point, probably in 4Q 2017-1Q 2018.
I'm leaning more towards a stable $60 at best. The catalysts boosting the oil price such as the production deals between major oil producers has already been priced into the market. Inventory draw-downs and increased oil demand at this point generally are not significant enough to produce a sustained upward swing. While crude might not be climbing high any time soon, the stability in crude could be helpful to other sectors.
Is oil heading to $5? Worthless article just like your advice that your members pay for.
How do I thumbs up this post. I installed this worthless app for real-time prices and I can see the analysis is about as good as cnbc.
What is trading? What is investing? The only difference between those is the timeframe window you looking at and conclude the market vector. Why crude oil can't be used for investing? Are you saying if i buy a barrel of oil in 99' and hold it through 07', my return won't be more than 100%? For short to medium term investors, they can invest in oil depending on their strategy. The author made it clear by stretching the historical timeframe to 83' and by 93' the pattern has made it clear on how oil has behaved throughout history.
What is trading? What is investing? The only difference between those is the timeframe window you looking at and conclude the market vector. Why crude oil can't be used for investing? Are you saying if i buy a barrel of oil in 99' and hold it through 07', my return won't be more than 100%? For short to medium term investors, they can invest in oil depending on their strategy. The author made it clear by stretching the historical timeframe to 83' and by 93' the pattern has made it clear on how oil has behaved throughout history.
Misleading article, the kind that get retail traders in trouble. Oil (and all commodities) are not for investing, they're for trading. Making it sound like you could have 50% upside on a commodity is nuts. Especially when right now, as of today, technicals are pointing toward $46, not $75.
Well said. Funny that this article comes out on a day when oil drops from +3% to -3%
Agreed
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