Trader who called for $26 oil now predicts this

It sounded crazy at the time.

In mid-November, when crude was trading at $41 per barrel, technical analyst Todd Gordon predicted that the continuation of oil's decline would take the commodity all the way down to $26.

And that is precisely what happened. On Thursday, Feb. 11, oil traded as low as $26.05 — a level it has since bounced off of powerfully.

Read MoreOil market downside looms amid 'humongous' pressures: BofA's Blanch

But before becoming convinced that $26 was indeed the bottom for crude, there is one more thing that Gordon needs to see.

"There's a cluster of resistance between $37 and $38," he said Thursday on CNBC's "Power Lunch." "If we can break through that, then I could say the low is secure, and I could pat myself on the back. But not before then."

First of all, since this zone was recent support (it is where crude oil bounced in August before breaking below in December), it is now a level of resistance, Gordon said.

Second, recent history shows that crude is capable of rallying as much as 50 percent in the midst of a larger downtrend, as it did in early 2015.

"What we need to see is a break above a 50 percent rally. Currently we're about halfway from the lows — so that points to about $38," he said.

This is a similar method to the one Gordon used to forecast $26.

His argument then was that history repeats — and just as oil fell 77 percent amid the financial crisis, it was doomed to drop 77 percent from its highs once again.

Read MoreThe chart that says crude oil is going to $26


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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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