A classic technical gauge may be pointing to further gains for crude oil.
West Texas Intermediate crude oil just posted a "golden cross," a technical formation that occurs when an asset's shorter-term moving average crosses over its longer-term moving average. In this case, crude oil's 50-day moving average crossed over its 200-day moving average.
This activity in the charts can often signal strong bullish momentum, said Bill Baruch, president of Blue Line Futures.
Crude oil futures traded up to a high of $55.22 per barrel on Wednesday, though Baruch said on CNBC's "Trading Nation" that he would look for a weekly close above this price to encourage a move up to $59 per barrel.
Ultimately, Baruch said he is watching for a close above $55.25 per barrel. Crude oil was trading near its highest level since July 2015 on Wednesday.
Adding to his bullish outlook is the backwardation seen in the oil market, which occurs when a future contract's price trades below the current spot price. This signals tightening in the supply, Baruch said, and is also an encouraging sign.
Crude oil settled slightly lower on Wednesday, paring gains made earlier in the session, at $54.30 per barrel.