Crude oil has risen powerfully since hitting $26 in the middle of February. But even as oil reaches above $45, one market technician says that prices are unlikely to reach $50.
Todd Gordon of TradingAnalysis.com uses crude oil track ETF (USO) to determine where oil could be heading even in the short-term. Currently, two counter-trend indicators could hint at oil's decline, according to Gordon.
"The rally that we've seen into the 200-period moving average has been $20.40, [the] total traveled distance from the $26 low to current price," Gordon told CNBC's "Trading Nation." last week. "Notice the distance traveled in the prior counter-trend swing: $20.55. So we have some very interesting symmetry here. "
Gordon also points to the retracement indicated by the weekly chart to illustrate how much resistance the oil exchange traded fund (ETF) faces leading up to $50.
"This is your textbook retracement that everybody looks for, this is the 61 percent retracement of the July decline down to the $26 low," the analyst said. "That 61 percent retracement is going to fall in at $47.70, so we have a mountain of resistance between $48 and $50 in crude oil," he added.
Given Gordon's bearish outlook for oil, the trader plans to short the ETF, exiting the position if his thesis is proven incorrect.
"I'm going to consider this trade wrong [and] contain risk when crude oil goes above 50 dollars," Gordon said. "While we're below $50, I'm going to maintain the short position in USO and look for a retest down into the $30's."
Some of Gordon's prior oil calls have proven impressively prescient. Back in November, Gordon called for oil to fall to $26.