Crude Oil futures have rallied in each of the last three trading days, with a 4% gain on Tuesday, and 'big' 6.4% gains on Wednesday and Thursday. The prompt contract closed at $45.22 per barrel. on Thursday at a new 20-day high, and the price crossed above the average price over the last 50 days. Wednesday and Thursday were both 'trend day' pattern gains, where the open of the trading is in the lower 20% of the daily high-low range, and the close is within 20% of the high of the range.
Q: How have Crude oil futures performed in the past when, during the first quarter of the year, they have seen a 'trend day' gain and the price crosses above the average price over the previous 50 trading days?
A: According to the 20 previous occurrences of this event, EventEdge indicates that NYM.CL has shown a strong bullish edge that peaks 31 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, Feb. 26, 2009) is Monday, April 13, 2009. NYM.CL rallies in 80% of the cases (16 of 20) by an average of 12.8% relative to the close on the event date. The average of the four declines is 1.5%. The overall return of the 20 cases is 9.9%, which, based on the close of NYM.CL on the event date ($45.22), provides a target price of $49.70.
This is a redux story - one whose conditions have occurred in the past and we've written it up before as a trading idea in February, 2007.
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Gibbons Burke is editor of MarketHistory.com.
Related Ideas:
Crude Oil - Trending above Average - February 19, 2007
