Heating Oil futures (NYM.HO) fell dramatically on Thursday, along with crude oil and other petroleum products. Closing at $3.2583 per gallon after dropping a 'big' 2.0%, is there any significance to the current events in HO this time of year?
Q: How has NYM.HO performed in the past when it experiences a 'big' decline, a percentage drop which is more than one standard deviation stronger than the average one-day percentage move in the last six weeks, and two consecutive 'lap days' in the month of April?
A: According to the 14 previous occurrences of this event, omitting repeat occurrences within 10 trading days, NYM.HO has shown a strong bullish edge that peaks 17 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, April 24, 2008) is Monday, May 19, 2008.
NYM.HO rallies in 93% of the cases (13 of 14) by an average of 8.1% relative to the close on the event date. The average of the one decline is 2.3%. The overall return of the 14 cases is 7.3%, which, based on the close of NYM.HO on the event date ($3.2583), provides a target price of $3.4962.
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HYPERLINK "http://www.markethistory.com/staff/detail.html?s=rsoudan" Ryan Soudan is an analyst with MarketHistory.com.
