Prominent Market commentator Jim Cramer highlights a chart analysis Carley Garner and said investors should prepare to buy oil next month, according to to a CNBC report.
“She believes there could be a final washout this week, possibly early December, and that washout could take Crude to the low-$70s or even the mid-$60s. Once we get there, she thinks this could be the mother of all buying opportunities,” he said.
See also: Short sale brokers
Oil was volatile this week after a Wall Street Journal report said OPEC members are considering increasing oil production by up to 500,000 barrels a day for December’s OPEC+ meeting. This was later denied by Saudi Arabia. West Texas Intermediate January contract prices fell to $75.40/barrel on Monday before paring losses and rising to $82.33/barrel on Tuesday.
That United States Brent Oil Fund BNO closed up 1.08% on Tuesday as the Vanguard Energy Index Fund ETF VDE closed 3.32% higher.
Thanksgiving Overhang: Cramer explained Garner’s analysis and pointed out a pattern Thanksgiving was bad for oil. “Historically, some of the most devastating oil declines have happened on or around Thanksgiving,” he said.
Garner’s explanation for such a trend is that the week includes the last trading day for oil futures in December, and OPEC always has a meeting in late November or early December.
“Consider the fact that vacation weeks tend to be very low in volume, meaning all moves tend to be disproportionately bloated because it doesn’t last [as] plenty to move a commodity — or, frankly, a stock — in these lighter times,” Cramer said, according to the report.
Continue reading: Fed officials warn of expensive holiday season: ‘If you decide to take in family and friends, expect significantly higher grocery bills’
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