Prominent market commentator Jim Cramer on Tuesday analyzed a chart by Carley Garner and advised investors to buy the dips in oil, saying that the sell-off in the commodity is largely over.
What Happened: “The charts, as interpreted by Carley Garner, suggest that the oil speculators have been mostly wiped out, so it’s time to buy the dips, because she wouldn’t be surprised at all if crude can rally another $20 from here,” he said according to a CNBC report.
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Following a softer-than-expected inflation data release for November, oil prices climbed and recorded their biggest daily gains in more than a month. The United States Brent Oil Fund BNO closed 3.06% higher on Tuesday, while the Vanguard Energy Index Fund ETF VDE closed over 1.89% higher.
Cramer said Garner’s prediction of a wash-out is playing out, and the commodity could see some upside as China reopens its economy and President Joe Biden’s administration looks to refill reserves when prices fall below $70 a barrel.
Chart Analysis: Cramer highlighted the weekly chart of the West Texas Intermediate futures and noted two events behind the support and resistance: the pandemic-induced crash and Russia’s invasion of Ukraine. “After each of those events, oil went back into the channel … which currently has a floor of support at $70 … and a ceiling of resistance at $95,” Cramer said.
Oil prices bounced off the $70 floor on Monday, and should be bouncing between these levels as long as the economy stays relatively stable, Cramer said. While prices could fall to $65 if the market sees volatility over the holidays, Garner expects their upward trend to continue, he said.
On Wednesday morning’s Asia session, West Texas Intermediate futures expiring in January were trading 0.37% lower at $75.11 per barrel.
Image and article originally from www.benzinga.com. Read the original article here.