Crude Oil Now Seriously Overbought - Expecting Declines

 |  Includes: OIL, USO
by: TickerSense

Crude's recent rally since 10/8 has pushed the commodity to a new high, but more notably the change was so rapid that it is now 6.5% overbought (at its peak yesterday it was more than 7% overbought).

In fact, at its current level of $87.40 per barrel, crude is two standard deviations above its 50-day moving average. We looked back at similar spikes this year where crude was two standard deviations above its moving average and also at least 5% overbought. In 66% of the cases (highlighted in red on the chart) crude traded down over the following week for an average decline of 1.79%.

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