This week, oil broke above the key $50 level for the first time since October 2015. Yet rather than interpret the move as a sign to buy, one top technician is warning investors not to chase the rally.
"I think it's all about risk-reward and there's probably no more important chart right now than the oil chart," Chris Verrone, a technician at Strategas Research Partners, told CNBC's "Fast Money" this week.
According to Verrone, it's the steepness of the move that bothers him most. In the past 72 days, oil has moved 20 percent above its 200-day moving average. "It looks excessive to us, we think there's a higher likelihood you come back and retest the 200 near 39, 40 bucks," said Verrone.