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Crude Oil Gains 50% When This Happens

Published 04/01/2015, 01:02 PM
Updated 07/09/2023, 06:31 AM

Crude Oil Data Points

Crude oil did something last month that it has done just nine other times in the past three decades.

Crude finished the month over 10% above its lowest price during March -- creating a potential reversal pattern -- after a large 12-month decline. The upper left plots points where crude oil created at least a 10% reversal pattern (bullish wick) following at least a 40% decline in the prior 12 months.

This combo (reversal wick and 40% decline) has only happened 9 times in the past 30 years. The chart in the upper left plots where this combo took place.

The table in the lower right looks at returns for crude when this combo took place. As you can see, crude had decent returns 3 months out (average 12% gain), with the returns being the best as time went along. The average gain one year out is 50%.

Was this the only rare event to take place last month? NOPE! I shared with Premium Members yesterday that similar rare opportunities took place in Bio Tech and the U.S. dollar last month as well, creating historically wonderful opportunities.

Latest comments

The price is bellow production cost of quite large part of industry, not to say what more would be needed for "investment" premiums.. . WTI will go soon to at least 60$, otherwise production will shrink and shrink.... . The law's of economy something work slow but always consistently.. . .
That's the problem with those who trade strictly by charts -- it paints a distorted picture. The same applies to those who trade using only fundamentals. You need both to have a chance of not trading like a total fool.
Exactly the way I make very good money on oil!
Ha ha. Crude to rise by 50%? Totally different fundamentals today. There wasn't an abundance of shale oil back then, demand is decreasing overall and OPEC still refuse to limit production. Mmmmm. If you're long, good luck!!
this can change quite fast. Shale was here for decades and nobody exploit it. They needed price above 100$ to become profitable.. . at 60$/ bbl nobody will invest in this type of production,.
Go long Chris! Good luck with that. Let's compare notes in 6 months
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