Oil has slipped over the last few days, leading some to believe that crude comeback is over.
While oil did recover on Wednesday, the general trend has been downward since oil hit above $50 last week. Strategas technical analyst Chris Verrone believes the downtrend is here to stay, especially given the risk associated with crude stocks.
"I think the risk outweighs the possible reward here," he said Wednesday on CNBC's "Trading Nation." "We've had a 95 percent rally over about 75 trading days. That looks excessive to us given the short magnitude of time."
Verrone also points to a long-term chart of oil that shows that crude is being "stretched" over its 200-day moving average, a smoothing mechanism which he believes will be "rechallenged" to the downside for oil.
But not everyone is so skeptical. Oil production is on the agenda for Thursday's OPEC meeting, and the bulls are hoping (perhaps beyond hope) for the announcement of an output cap, in order to quell global oversupply.
"We're really expecting a recalibration of the global oil markets over the course of the next six months, where production should end up coming down more than expected, which should then lead to high oil prices," said Strategic Wealth Partners president Mark Tepper. "Even though production may be contracting, as long as oil prices are rising, those share prices can outperform."
Ultimately, Tepper believes that "although the short term may look a little rough for oil, over the course of the next six months oil and energy stocks look promising."
Oil settled at $49.01 for the day after dipping below $48 per barrel during Wednesday trading.
