Crude Oil Gains 50% When This Happens
Chris Kimble | Apr 01, 2015 01:02PM ET
Crude oil did something last month that it has done just nine other times in the past three decades.
Crude finished the month over 10% above its lowest price during March -- creating a potential reversal pattern -- after a large 12-month decline. The upper left plots points where crude oil created at least a 10% reversal pattern (bullish wick) following at least a 40% decline in the prior 12 months.
This combo (reversal wick and 40% decline) has only happened 9 times in the past 30 years. The chart in the upper left plots where this combo took place.
The table in the lower right looks at returns for crude when this combo took place. As you can see, crude had decent returns 3 months out (average 12% gain), with the returns being the best as time went along. The average gain one year out is 50%.
Was this the only rare event to take place last month? NOPE! I shared with Premium Members yesterday that similar rare opportunities took place in Bio Tech and the U.S. dollar last month as well, creating historically wonderful opportunities.
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