To one market technician, crude oil is trading like it’s 2009 all over again. And that could be very good news for the oil bulls, according to CNBC. Ari Wald, head of technical analysis at Oppenheimer, looked back to crude oil’s massive decline in 2008. After losing nearly 80 percent of its value, oil prices rallied from the lows in 2009.
And Wald says that crude oil today looks very similar the oil chart of six years ago. “If you look at that surge in February, we see a lot of similarities to the low for crude back in late 2008”, he said.
Just as it did at this point on the chart in 2009, crude is set to rise further from here, Wald says. “We’ve been saying that we need crude to start to stabilize. Well, it stabilized, and the most compelling piece of evidence was the breakout above 54 dollars.”
Crude oil stalled at 54 dollars per barrel several times this year, but managed to rise above that level on Wednesday, before continuing higher into the end of the week.
“This has been the first higher high now for oil, so I think this is setting up for a trading bounce into the mid-60 dollars range,” the technician said. “I think this is a near-term trade that oil moves higher.”
At the same time, Wald cautions that “the longer-term structure is still weak for oil, so I think you can find some selling pressure here come the summer months.”
