Trading oil can sometimes feel like trying to grab a meteor by the tail — and 2007 was the market’s biggest year in more than a decade. Crude has essentially been in a nine-year bull market (Figure 1), and many believe the market can only go up in the long run, given oil is a finite resource and unending turmoil in the Middle East always threatens (at least in the minds of traders) global supplies.

Even if it seems like crude oil never pulls back, there are signals when the market has finished up a downside move and is ready to move higher. The following weekly bar pattern has not occurred very often in the past 24 years, but when it has, the upside follow-through has often been significant.