Crude oil just hit its highest level in two months and is up more than 8 percent in the past four days as of Friday — and the technician who correctly called the move said the rally is far from over.
In a recent interview on CNBC's "Futures Now," Scott Redler, chief strategic officer of T3Live.com, said we could see crude make a run toward $50 in the coming days. Crude came within 25 cents of the key psychological level on Friday.
This week, Redler explained why we could continue to see a move higher in the commodity, in spite of widespread skepticism that OPEC's production cuts will spur a sustained move higher.
"You'll see that we have already had a move" to the upside, Redler told CNBC, setting oil up for "a bigger trend line."
He predicted that crude would likely pause around the $50, $51 level; however, if it is able to hang above that level and doesn't fall, "you might actually see a little bit more of a move [higher]."
Other analysts are still widely bearish on crude. In a research note to clients on Friday, Bank of America-Merrill Lynch reiterated that it was expecting U.S. oil to average $47 this year and $50 per barrel in 2018. The bank expects Brent crude to average $50 - $70 per barrel through 2022.
Still, oil's bounce has also pushed up energy stocks. The sector was the second best performer on the week, outperforming the broader market.
Redler pointed out that the energy ETF, XLE, chart shows a recent break above the descending trend line.
"Here's your descending trend line here. Going sideways, and now we're a little bit above it. We're actually at $66.36 ... and now if we can get above this little spot, and oil continues as it's going, I think we could see a move towards like $68 [in the XLE], and that could be a good trade," he added.
"Now I think you can be long on the XLE verse $65, and we could probably see another 5 to 7 percent [upside move] as long as everything stays on course, which it looks like as oil's approaching that $50, $51," Redler said.
Crude oil passed above its 200-day moving average level of $49.41 and was trading more than 1 percent higher at the $49.62 range midday Friday.
Correction: Scott Redler said the Energy ETF XLE could go to $68. The headline on an earlier version mischaracterized his comments.