RSS
Home
Crude oil may surge 20% higher which means $3 gasoline
Print
Email
RSS
Subscribe
Crude Oil Still Looks Bullish
Despite the bearish activity in the stock market on Friday, November 27, 2009, crude oil may be poised to rocket higher. A few days ago, Katie Stockton of MKM commented on oil, and is projecting a target price of $96.50 per barrel.
50 Day Moving Average
She said the break out is in place, and oil is in testing its 50-day moving average. Today, price actually fell well below the 50-day moving average only to close the day just below the 50 day average. It will need to close above the 50-day average on Monday or Tuesday to keep the uptrend alive.
Bull Flag Target is 20% Higher
Even with the 2.5% drop in price today, crude oil is still setting up a bull flag on the daily chart. Looking at a 5 month daily chart of USO, which is the United States oil fund, the bull flag sticks out like a sore thumb. A breakout of the upper trend line will take oil prices roughly 20% higher, which explains Katie's prediction of $96.50 oil.
Bull Flag Breakout Would Mean $3 Gasoline
Katie's prediction is in line with the bull flag pattern, but the breakout has not occurred yet. If the breakout does occur, it will take gas prices back to the $3 level. So far this year, the stock market has seen a positive correlation to the rise in oil and gold prices. Gold has recently reached its long term inverse head and shoulders target price, but may have one last surge left in it if crude oil breaks out. At some point, the market will have to view rising oil prices as a huge negative for the consumer's wallet.
Related Articles:
Comments
