Oil is strong in 2023

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 Oil is strong in 2023

When the RSI drops below 30 then rises, it gives a buy signal from an "oversold" level. It tells us a falling stock's sell-off is likely over. And we're seeing that right now in oil...

The last time we saw this happen was in November 2021... right before oil went on a seven-month rally of more than 75%.

We also saw a similar oversold signal in August 2021. Oil had fallen double digits in roughly two months. Then, it shot up 35% after the oversold signal and into October.

We even tested this data going back 32 years. And a typical six-month return following similar oversold levels led to a 6.4% rally in oil. The return gets even better when you go out a year, with oil up 8.7%.

Today, oil has already surpassed those returns. It's up 15% in almost a month and a half. But again, this rally isn't over.

You see, oil's recent 15% run came during a hot streak. Oil rose eight days in a row at the beginning of January. Take a look...

This kind of run is impressive. And by looking back 40 years, we can see that similar events have been a positive sign for the commodity over the next year.

Since 1980, buying after similar streaks has led to a winning trade 72% of the time. And history shows investors could have made nearly double-digit gains...

Oil has been rising slowly over the past 40 years... returning 2.5% per year. That's nothing to write home about. But the numbers change following a hot streak...

Oil's typical six-month return after an eight-day rally is 2.5%. And the one-year return is 9.9%. That crushes the typical annual move in oil.

So while we could see more volatility in the shorter term, history shows this commodity is set for a strong run over the next 12 months.

Oil is on track for a big year in 2023... Don't miss out.


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