Crude Seeing Textbook Bullish Reversal - Technical Analyst
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11 Buy, 17 Hold, 10 Sell
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In free-fall since Thanksgiving, crude is finally showing signs of life with WTI up 5% today. Some believe the reversal is due to sharp production cuts at oil companies; others think it is because of more bullish talk from OPEC; still others believes it is simply short covering or down right seller exhaustion. Some now see crude showing textbook signs of a bullish reversal. Earlier today, Evercore ISI's Head of Technical Analysis Rich Ross published a note suggesting that Crude has established an important technical low and could continue to trend higher.
Ross said, "The technical evidence continues to mount that Crude Oil has established an important low and binary reversal in trend higher. Broadly speaking, the same can be said about the major Oil related equity indices featured herein. Moreover, given the strong correlation and remarkable technical symmetry across asset classes with the precipitous plunge in petroleum prices, our work further suggests that meaningful upside remains in the short and intermediate term for Global Equities, the Euro, and Interest Rates (to a lesser degree). Importantly, we have varying degrees of conviction across the individual components of this trade (see charts) and believe that several of these moves may ultimately represent counter trend advances within the context of longer term structural downtrends. Nevertheless, we see enough evidence and upside in the charts to expand our constructive view on equities across asset classes."
Related ETFs: Market Vectors Oil Services ETF (NYSE: OIH)
Related stocks: Cameron International Corp. (NYSE: CAM), Nabors Industries (NYSE: NBR)
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