The price of WTI crude could be headed for a jump of between 20 and 50 percent, judging by a bullish breakout pattern that suggests a major rally could be coming for an asset, and that’s just this century occurred three times for crude oil. told a stock strategist CNBC this week.
“Crude oil has seen a so-called golden cross on the weekly chart,” Matt Maley, stock strategist at Miller Tabak, told CNBC’s “Trading Nation” program.
The so-called golden cross appears on a chart when the short-term moving average of an asset moves above the long-term moving average. The pattern on the Gold Cross chart points to a potential for a major rally.
“That’s only happened three times since the turn of the century and each of those three times has been followed by a very strong further rally in crude oil, somewhere between 20% and 50%,” Maley told CNBC.
According to the strategist, the energy sector looks good if the market holds up and continues to rise. The energy sector has outperformed the overall market by a large margin since October last year, even with the slump since July, Maley also said. If the market holds up, energy stocks could do very well in the fourth quarter, the strategist added.
Despite ongoing concerns about the Delta variant, major investment banks remain bullish on oil, although not all are as bullish as Goldman Sachs, for example.
Goldman’s Analysts Held Their Brent Crude Price Prediction for $80 a barrel by the end of this year, although they expect the rise in the Delta variant will put a temporary drag on oil demand over the next two months.
“Looking beyond the Delta headwinds, we expect demand recovery to continue alongside rising vaccination rates,” Goldman Sachs said in a note in mid-August.
By Charles Kennedy for Oilprice.com
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