March 9 (Bloomberg) -- Crude oil may rally to $55 a barrel in New York within weeks if prices signal a “double bottom” by rising above $48.59, according to technical analysis by FuturesTechs.com Ltd.
A double-bottom is a “W-shaped pattern, with two similar lows” and “once the high between the two lows is breached we get a buy signal,” FuturesTechs director Clive Lambert said in an interview today from Southend-on-Sea, U.K.
“A move through $48.59 may trigger that buy signal and a rally with an initial target of $55,” Lambert said. “But while we’re below that there’s a danger we’ll remain rangebound.”
Some very good work at Bespoke Investment Group back in October shows fibonacci retracements on crude.
What is interesting looking back on this, is the way crude has bounced along under the 76% retracement line of $47.52. We saw crude touch $33 back in (January?) and since has gradually edged upward. Now it is threatening to break through the critical $48 support level. If it can sustain it, could this be the beginning of a new commodities rally?
Will we see crude bounce in between the $48 and $66 support levels?
If so, we could expect the TSX to start to move upward again while the Dow edges lower.