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Is double bottom forming on oil chart?

(Chart courtesy of optionsHOUSE )

Energy has gotten slammed, but now it's trying to hold its ground.

CLG (Feb '16) Crude Oil futures closed at 36.11 yesterday, 0.01 above the level where they bounced at the start of the week. Some chart watchers may interpret that as a double-bottom, with the potential for a rebound.

CL controls 1,000 barrels of West Texas Intermediate, so a single point move in the price represents $1,000 in client accounts. They need initial margin of $5,060 to get long or short a contract.

Most of the price action recently has been to the downside because of a global supply glut. The Organization of Petroleum Exporting Countries worsened the matter on Dec. 4 by increasing its production target, and inventory reports this week showed stockpiles continuing to grow.

Monday's price action illustrates one of the benefits of futures because CL reversed from a new low before 9 a.m. ET, so it couldn't have been played using stock-based instruments like the U.S. Oil Fund (USO). The bounce also produced a " hammer candlestick ," another potentially bullish pattern.

For more information on futures, please visit The Futures Institute (Powered by CME Group) .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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