Oil's chart just formed a key technical pattern that's sure to have the bulls running wild, but one trader warns investors shouldn't get too carried away.
"People are going to get really excited about the fact that we are seeing what some call a 'golden cross,'" Scott Nations told CNBC's "Futures Now" on Tuesday. A golden cross refers to when a short-term moving average crosses above a long-term moving average — technicians often view this occurrence as a bullish reversal in trend. In the case of oil, its 50-day moving average touched the 200-day moving average Tuesday.
According to Nations, in crude's specific case, where its 50-day moving average crossed its 200-day moving average on Tuesday, it's merely a temporary bounce. "[The 'golden cross'] means almost nothing when the 200-day moving average is falling as it is right now," explained the chief investment officer and president of NationsShares.
Furthermore, Nations noted that oil is butting up against resistance around the $45 level. That doesn't discount the fact that we could see slightly higher crude prices in the near future, as Nations pointed out that the outages due to the wildfires in Canada will continue to support prices in the near term.
However, he said the likelihood of a rip-roaring rally is still slim. "I think we are going to have to see something really fundamental change before we can see a lot more upside."
Oil was up more than 2 percent Tuesday, trading at just under $44.50 per barrel.