Technical analyst Robert Moreno on TheStreet this morning highlighted oil’s bullish move:
The weekly chart shows crude breaking down from a multi-year triangle pattern in August of 2014 and then dropping sharply to under $30 a barrel early this year.
The price action over the last 14 months has formed a large inverse head and shoulder base with neckline resistance in the $52 area.
Moreno also notes that current price patterns suggest a potential $75 price target, although that level could take quite some time to reach. $52 will also likely be a key technical level for crude, with a breakout above that level leading to more gains.
Getting into the ETF space, the ProShares Ultra DJ-UBS Crude Oil ETF (NYSE:UCO), which provides double leveraged bullish exposure to crude oil prices, rose $0.21 (+1.88%) to $11.36 per share in early trading. The UCO currently boasts nearly $1 billion in assets under management, which is very impressive for a leveraged product, and illustrates strong bullish sentiment.
Meanwhile, the triple leveraged VelocityShares 3X Long Crude ETN linked to the S&P GSCI Crude Oil Index Excess Return (NYSE:UWTI) gained $0.69 (+2.57%) to $27.50 per share. UWTI has over $1.3 billion in assets under management, which makes it one of the most widely-owned leveraged exchange traded products in the markets today.
Both of these leveraged bull plays have seen strong interest throughout 2016, which is a bit surprising, given crude oil’s multi-year slide. Bottom-fishers may finally have found a floor now, however, with the recent OPEC production cap deal looking like a true game-changer for the energy industry.