Crude oil has traded in a tight $10 range for the better of the past two months, but according to one top technician, the commodity could be set to break out in the second half of the year.
"We've seen commodities estimates move higher across the Street for the third and fourth quarters, and we're seeing good demand data," technical analyst Darren Wolfberg said Thursday on CNBC's "Futures Now."
"We've really been trading in this range from $51.50 to $57.50 and being that we've been in this for a bit now, I would expect for us to actually break through to the upside," said Wolfberg, head of U.S. cash equity trading at BNP Paribas. "I watched the commodity jump off the $45 level and it has been at this midpoint where we've been consolidating for two months," he added. "Resistance is coming in at $61.40, and I am watching that level closely."
Technicians often recognize consolidation patterns as clues to where a security could go next, as these chart formations tend to end in the direction from which they came. In crude oil's case we saw a 47 percent rally from the low in March to the year-to-date high in May. And Wolfberg believes it could be time to pick up where it left off. "I believe there is risk to the upside to possibly $70, which would complete the move," he said.
That's a 17 percent move higher than current levels and puts crude at the highest level since November 2014.