A quick look at an oil futures chart seems to confirm that oil has bounced…

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This movement also appears to be stronger than the flattish bounce we saw just under the $65 mark.

One key area to note is when oil futures dipped below $55 a barrel. Look at the strong volume, and look how prices have turned around. In just eight trading days, oil has climbed more than 7.75%.

Traders certainly seem to think this is a bottom -- at least for the time being.

A couple weeks ago, I noted several formations floating around in oil. In an article I called “The Murky Patterns in Oil Prices,” I told you about a possible rounded top formation (bullish); a double bottom formation (bullish); and a head-and-shoulders formation (bearish).

Here's the thing about these three patterns. To satisfy any of them, oil prices need to rise. Especially for the bearish pattern.

The head-and-shoulders formation that could be forming still needs its right shoulder. For that right shoulder to form, oil prices need to rise, most likely to the mid $60s over the next three months.

That's about $10 from where we are now.

For the rounded top formation, prices would have to rise back to the apex of the dome at about $65 a barrel in order to break out. Again, that's about $10 from current prices.

The long-term double bottom formation we found in the two-year chart is not really in effect any more. Since we dropped below $55, the double bottom is not as clear a pattern as it once was. But let's consider it anyway, for the sake of argument.

The double bottom pattern would need oil to rise as high as $80 in order to break out higher.

Now, that's quite a stretch, and I think it would take quite a while to reach those price levels again (if we have any luck with us). Regardless, even a move in this formation means a rise in oil prices.

In the short term (three months) expect oil price to rise back to the $60 range, and possibly shooting as high as $65.